Human Resource Management 751 v1

HUMAN RESOURCE MANAGEMENT
Sub Code - 751
Developed by
Prof. Venkat Iyer
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe 2. Dr. B.P. Sabale 3. Prof. Dr. Vijay Khole 4. Prof. Anuradha Deshmukh
Group Director Chancellor, D.Y. Patil University, Former Vice-Chancellor Former Director
Welingkar Institute of Navi Mumbai (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Mr. Smitesh Bhosale

Dean – Finance Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. Dr. V.H. Iyer Prof. Vineel Bhurke

Dean – Management Development Programs Faculty – Rural Management
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai
Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

Printed and Published on behalf of Prin. L.N. Welingkar Institute of Management Development & Research, L.N. Road, Matunga (CR), Mumbai - 400 019.
ALL RIGHTS RESERVED. No part of this work covered by the copyright here on may be reproduced or used in any form or by any means – graphic,
electronic or mechanical, including photocopying, recording, taping, web distribution or information storage and retrieval systems – without the written
permission of the publisher.
NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.
1st Edition, November 2022

PREFACE
PREFACE
It’s a sheer pleasure to write a book for academic purpose which involves
inclusion of state-of-art inputs along with the academic theory.
As time flows ahead, practices and processes also get modified with
changing scenario and the needs of the change.
The task allocated to me was to rewrite the book HUMAN RESOURCES
MANAGEMENT written by me years back to make it relevant to current
practices.
At the onset, let me thank Dr. Rajesh Aparnath, HOD – Distance Learning
HYBRID Program to award me this privilege.
Writing a book although authored by one involves team work and support.
In this endeavor, I was supported by three competent colleagues from the
DLP – HYBRID department for various interrelated activities to make the
book “happen”.
I thank Ms. Vidya Shetty for structuring the book, Ms. Hemagini Tambe for
preparing the PPT slides and Ms. Amandeep Kaur for the overall strategic
support.
This book is a modified version of the earlier one, in that, it excludes
certain concepts that was felt superfluous for a basic book on HR. It
includes topics like Work from Home (WFH) and the role of HR in future,
Employee Engagement (EE) and a detailed account of how it plays a critical
role in modern global corporate scenarios. This has, so far, not been
covered in HR texts of the past precisely.
This book has been written bearing in mind that state-of-the-art
understanding of HR with a deeper understanding of the organisations’
work in the fast scenarios today.
I feel proud and humbled to be given the opportunity to write this book
and have taken all efforts and resources to furnish a “good product”.
Wishing every reader: Value-added Reading!!
Prof. Venkat S. Iyer
3
CONTENTS
Contents
Chapter No. Chapter Name Page No.
1 Introduction to Human Resource Management 5-26

2 Job Analysis 27-51
3 Manpower Planning 52-66
4 Recruitment, Selection, Induction and Orientation 67-92
5 Motivation 93-124
6 Training and Development 125-147
7 Employee Engagement 148-157
8 Performance Appraisal 158-183
9 Employee Welfare 184-199
10 Compensation Administration 200-221
11 Separation 222-238
12 Human Resource Information System 239-253
13 Work Life: Quality and Related Issues 254-268
14 Total Quality and Human Resource Management 269-282
15 Ethics in Human Resource Management 283-305
16 Recent Trends in HRM 306-313
4
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Chapter 1
Introduction To Human Resource
Management
Objectives
After studying this chapter, you should be able to understand:
• What is Human Resource Management (HRM)?
• Functions involved in HRM
• How HR has evolved over the years
• Differentiate between Personnel Management, Industrial Relations, HRM
and HRD
• Process of HRM in an organisation
• Factors affecting HRM in an organisation
• Future of HRM – Strategic HRM and HCM.
Structure:
1.1 Nature of Human Resource Management (HRM)
1.2 Functions in HRM
1.3 Evolution of HRM
1.4 Difference between Personnel Management, Industrial Relations, HRM
and HRD
1.5 HRM Process
1.6 Factors Affecting HRM
1.7 Future of HRM
1.8 Summary
1.9 Self Assessment Questions
5
The story continues…….

After a few days, Ajay Verma had to visit the factory at Ghansoli. On the
way to the factory……..
Ajay Verma: What So Rajesh, are you enjoying your work? What about
your studies?
Rajesh: Yes Sir, I am enjoying my work. As far as studies are concerned, I
have joined a distance learning course but I am finding it difficult to
understand certain subjects like Human Resource Management.
Ajay Verma: Is it? Well, ask me questions and I will try my best to answer
them.
Rajesh: What is Human Resource Management (HRM)? What is the need
for HRM? What are the functions involved in HRM?
1.1 NATURE OF HUMAN RESOURCE MANAGEMENT (HRM)

Human Resource Management is basically the management of human
resources in an organisation. It is a process where people and
organisations are brought together so that the goals of each are met. In a
dynamic and competitive business environment, it is very necessary for an
organisation to have the right resources especially their employees, to
survive and succeed.
Organisations have realised that they may be technologically advanced but

it is the people who offer competitive advantage to an organisation. How
do people provide the competitive advantage? People offer skills,
capabilities, systems, practices, speed, language, bonding and behaviours,
which help an organisation to execute its strategies successfully.
Nowadays, organisations ensure that along with the organisational
objectives, even the individual objectives of their employees, are achieved.
6
1.2 FUNCTIONS IN HRM

HRM typically consists of the following functions:
• Planning: Preparing forecasts of future HR on the basis of an
organisation’s environment, mission, objectives and strategies.
• Staffing: Obtaining people with the appropriate skills, abilities,
knowledge and experience to fill jobs in the organisation. This involves
human resource planning, job analysis, recruitment and selection.
• Developing: Analysing learning requirements to ensure that employees
possess the knowledge and skills to perform their jobs satisfactorily or to
advance in the organisation. Performance appraisal is done to identify an
employee’s ‘key skills and competencies’.
• Monitoring: This includes job evaluation, performance appraisal, pay
and benefits.
• Maintaining: This involves workplace safety, health and welfare policies
and compliance with statutory requirements.
Rajesh: Oh, so this is what HRM is all about. But Sir, how did it start?
Ajay Verma: Well, it all started with the industrialisation……..
7
1.3 EVOLUTION OF HRM

Human Resource Management developed gradually over a period of time.
Its key milestones were:
• Period: Milestones in the development of Human Resource Management.
• 1890-1910: Frederick Taylor develops his ideas on scientific
management. Taylor advocates scientific selection of workers based on
qualifications and 1910-1930. Many companies establish departments
devoted to maintaining the welfare of workers. The discipline of industrial
psychology begins to develop. Industrial psychology, along with the
advent of World War I, leads to advancements in employment testing and
selection.
• 1930-1945: The interpretation of the ‘Hawthorne Studies’ begins to
have an impact on management thought and practice. Greater emphasis
is placed on the social and informal aspects of the workplace affecting
worker productivity. Increasing the job satisfaction of workers is cited as
a means to increase their productivity.
• 1945-1965: In the US, a tremendous surge in union membership
between 1935 and 1950 leads to a greater emphasis on collective
bargaining and labour relations within personnel management.
Compensation and benefits administration also increase in importance as
unions negotiate paid vacations, paid holidays, and insurance coverage.
• 1965-1985: The Civil Rights Movement in the US reaches its apex with
passage of the Civil Rights Act of 1964. The personnel function is
dramatically affected by Title VII of the CRA, which prohibits
discrimination on the basis of race, colour, sex, religion, and national
origin. In the years following the passage of the CRA, equal employment
opportunity and affirmative action become key human resource
management responsibilities.
8
• 1985-2000: Three trends dramatically impact HRM. The first is the

increasing diversity of the labour force, in terms of age, gender, race and
ethnicity. HRM concerns evolve from Equal Employment Opportunity and
affirmative action to “managing diversity.” A second trend is the
globalisation of business and the accompanying technological revolution.
These factors have led to dramatic changes in transportation,
communication, and labour markets. The third trend, which is related to
the first two, is the focus on HRM as a “strategic” function. HRM concerns
and concepts must be integrated into the overall strategic planning of the
firm in order to cope with rapid change, intense competition, and
pressure for increased efficiency.
• 2000-Present: With the advent of international/global HRM framework,
practices and policies, business have multiple locations and multicultural
factors affecting their work functions and efficiencies.
HRM has evolved into glocalisation – thinking global at the corporate

level and acting local at the regional level.
There are also conscious shifts from a central HRM function to a

decentralised HR role involving corporate HR driving the various
functional verticals with autonomy.
Activity A
List down the stages in the development of HRM.

........................................................................................................
........................................................................................................
........................................................................................................
Rajesh: Sir, but I am confused. So many times, people use the terms –
HRM, Personnel Management, Industrial Relations…..Do they mean the
same thing?
Ajay Verma: Yes, I know. Many people use these words and they think
they are talking about the same thing. But there is a slight difference in all
these terms.
9
1.4 DIFFERENCE BETWEEN PERSONNEL MANAGEMENT,

INDUSTRIAL RELATIONS, HRM AND HRD
Personnel Management is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and development, layoff
and retrenchment, remuneration and incentives. Industrial relations cover
union-management relations, joint consultation, collective bargaining,
grievance and disciplinary procedures. Human Resource Management
includes Personnel Management and Industrial Relations as well as the
welfare aspect which includes working conditions and amenities. HRM is
also different from Human Resource Development (HRD). HRD is a function
which is more concerned with training and development, career planning
and development, and organisational development. HRD is a part of HRM.
Personnel management is a forerunner to what is now popularly termed as

HRM. We need to know the differences between the two processes.
Personnel management could be imagined as a “9.00 to 5.00” approach of

managing employees. Organisation realised that they need to retain people
and give them “An icing on the cake” by adding a little more than just
compensation. As a result, company started treating their employees with
a lot of feel-good, motivating factors like subsidised lunch, transportation,
a healthy workplace, etc. All this was focused on the fact that the
employee who is with the company during the working hours (9.00 a.m. to
5.00 p.m.) would continue to work for long.
In short, Personnel Management address the employees’ feel-good factors

while they are within the gamut of the companies’ work timing, i.e. 9.00
a.m. to 5.00 p.m. By default, the organisation was not really concerned
about the employees before 9.00 a.m. and after 5.00 p.m.
On the other hand, HRM has evolved from PM and could be considered as
“24/7” approach in which, the “total employee” is taken into account.
The term “Total employee” means that the employee has other dimensions
in his life other than only work. These other dimensions are broadly
mapped as: home, work, social and spiritual zone of living of the
employee. These zones affect the employee and his behaviour, attitude,
etc. at the workplace.
10
HRM ensures that the other dimensions are also supported through polices,
procedures and action towards the overall well-being of the employee. For
example, companies offer low interest housing loans, subsidised/free
education for children, club membership and de-stressing programmes
which are paid for by the company.
Thus, HRM takes care of the total employee 24/7.
Rajesh: Thank you Sir. You have resolved a major query for me. Now, I
can understand what these terms stand for whenever they are used by
other people.
Ajay Verma: I am glad to hear it…
Rajesh: How is the HR process structured in an organisation?
Ajay Verma: Yes, I was just getting to that topic.
1.5 HRM PROCESS

HRM is an ongoing process and it starts from Job Analysis. The HR process
in an organisation is structured as below:
11
Fig. 1.1: HRM Process
Job Analysis
It is the process of collecting job-related information which will then help in

the designing of a job.
Manpower Planning
Process of forecasting an organisation’s future demand for, and supply of,

the right type of people in the right number.
Recruitment and Selection
Recruitment involves attracting and obtaining applications from eligible job-

seekers.
Selection is the process of choosing the right individuals for a job in an

organisation, out of the pool of job applicants.
12
Motivation
Motivation undertakes to understand and change an employee’s behaviour

for increase in the employee’s performance.
Employee Engagement
Employee Engagement address the emotional engagement of the employee

with the job function, the work environment, the organisation itself and the
company brand as a whole.
Training and Development
It refers to the imparting of requisite skills, abilities and knowledge to an

employee.
Employee Welfare
Employee welfare ensures that an employee receives other benefits and

services like good working conditions, retirement benefits, leave, leave
encashment, etc.
Performance Appraisal
It is an objective assessment of an individual’s performance against the

individual’s objectives or benchmark laid down.
Compensation Administration
Compensation or remuneration is what an employee receives in return for

his or her contribution to an organisation. Compensation Administration is
concerned with the administrative aspect of the compensation dispersal.
Separation
Separation is a process concerned with when an employee leaves an

organisation either voluntarily or involuntarily.
13
Ajay Verma: That, in a nutshell, was how HR works in an organisation. I

will explain these in depth, later.
Rajesh: Ok Sir. By the way, is HR affected by what happens in the world?

Or is it only concerned with the organisation?
Ajay Verma: HR is very much affected by what happens in the world

around us.
1.6 FACTORS AFFECTING HRM

HRM is affected by the environment in which it functions and HR
professionals have to understand the various forces which form the
environment for a better functioning of the organisation. HRM is impacted
by two environments – External and Internal.
External environment consists of the political factors, legal factors, job

market, competitors, customers, economic growth, diversity, globalisation,
technological factor and cultural factor.
Internal environment consists of forces like strategy, unions and

organisational culture.
EXTERNAL ENVIRONMENT
Political-Legal
HRM is impacted by the various political forces or institutions in a country.

This can be seen by the sons-of-soil policy followed by political parties. HR
professionals have to ensure that the recruitment of employees is done by
keeping this in mind.
Any changes in the political party may also result in a subsequent change
in the labour laws laid down. HR professionals have to take due care as to
the selection of employees is done with the various reservation
requirement. They also have to ensure that there is no discrimination done
on basis of religion, race, caste, sex or place of birth. They also have to
ensure that there is no employment of children in the factories and that
there is equality of opportunity in terms of employment. All HR activities
are affected by the various labour laws, and care has to be taken that the
activities are carried out with due diligence to these labour laws.
14
Job Market
Job market provides the supply of manpower to the organisation. Job

market consists of employment exchanges, universities, colleges, training
institutes, consulting firms, etc. The quality of the human resources in an
organisation depends on the quality of the job market. HR professionals
have to look for the best quality while recruiting employees for the
organisation.
Competitors
Competition plays a very important role in some of the HR functions.

Today, there are several job offers for a right candidate and the candidate
chooses the organisation with the most attractive terms and conditions.
When there is a scarcity of skilled and talented professionals, the
organisation and its HR department have to groom its own employees
through training and development. The HR department also has to retain
them through attractive pay packages.
Customers
Today, in a highly competitive and demanding world, customers want high-

quality products and services at reasonable prices. The quality of products
and services offered is mostly affected by the employees who provide
these services. In such a scenario, the qualifications and the skills of the
employees comes into focus.
Economic Growth
The quality of labour and human resources is affected by the economic

growth or conditions prevalent in a country. In advanced countries, the
government spends more on education and health facilities, which in turn
assures better quality of labour. This in turn ensures higher productivity. In
developing countries, the governments have understood this importance
and hence are developing policies that will ensure better education and
health facilities.
15
Diversity
Today, the human resources function is characterised by diversity. The

human resources in any MNC is very diverse in terms of nationalities,
cultures, religions, languages and dialects, educational qualifications, skills,
age, genders and other factors. HR managers must learn to manage this
diversity so that it helps the organisation in terms of creativity, innovation,
increased productivity and improved decision-making.
Globalisation
‘The world has become local’ – the world today is moving towards
globalisation. This in turn has a lot of influence on HR functions. The hiring,
training, compensation and retaining strategies are adopted and followed
keeping the global perspective in mind. A knowledgeable and skilled
Human Resource force keeps a company competitive and attracts foreign
investments, joint ventures and collaborations. The mantra followed by
many companies is – ‘Be Local, Think Global’.
Technological Factor
Technology has affected HR functions considerably. In the highly

competitive market, changes in technology happen almost on a daily basis.
Employees have to keep abreast of the recent technological changes
especially in the field of Information Technology. Job-seekers are highly
professional and knowledgeable. Today, it is very common for a Software
Engineer to enroll himself for a MBA degree in Finance. It becomes very
difficult for HR managers of an organisation to manage such a highly
talented and technology advanced professionals. HR has to devise new
strategies to motivate, train and retain these employees. Today, with
technology advancement, it is very common to find employees working
from home rather than from office. Constant advances in technology has
put intense competitive pressure on firms to implement efficient means of
operations.
16
Cultural Factor
Attitude of human resources towards work is the result of their cultural

background. Even the work ethics, achievement needs and effort-reward
expectations are a result of culture. For example, Japanese workers are
dedicated to achieving the highest quality in their work. This is a result of
their cultural upbringing. Indian workers are committed to work and are
loyal to their organisations. They equate their own individual welfare with
the prosperity of the organisations. Though this is changing in the current
scenario, by and large, this holds true for most of the Indian employees.
INTERNAL ENVIRONMENT
Strategy
Strategy of an organisation ensures that the objectives of the organisation

and the resources of the organisation are aligned properly. Success of
many companies depend on the high alignment of their strategy, structure,
human resources and management. HR department of an organisation has
to ensure that the recruitment and training of human resources is aligned
with the organisational strategy, to achieve a competitive edge in the
market.
Unions
Unions were formed so that the workers have a collective voice which was
useful for bargaining better working conditions, pay raises and other
benefits. Nowadays, the trade unions have their own political linkages.
Thus, the HR managers have to be very careful while dealing with the
Unions. Also sometimes, there are more than one union in an organisation
which makes the job of the HR manager challenging while holding
discussions regarding collective bargaining.
Organisational Culture
Every organisation has its own culture which is a product of its human
resources, organisational successes and failures. The culture of an
organisation reflects its vision, its past and its future. Also, there may be
conflicts that arise due to mismatch of the organisational goals and the
individual goals of the employees. HR department has to proactively adjust
to the culture of the organisation as well as manage the conflicts that may
arise out of such mismatches.
17
Working Climate
Within the organisation, the employees create a climate of working based

on their understanding of the organisational culture. The working climate
thus created has an informal way of working, aiming at getting work done,
usually has a disconnect between the culture and itself in terms of actions,
expected behaviours, values, etc.
This, in turn, affects the internal environment of the organisation.
Activity B
What are the various factors that affect HRM in an organisation?
.........................................................................................................
.........................................................................................................
......................................................................................................
Rajesh: That was fascinating. But Sir, times are changing. Will HRM
remain the same or will it change?
Ajay Verma: Time and Tide wait for no one. How will organisations
survive if HRM does not change?
1.7 FUTURE OF HRM

Strategic HRM
The advent of HRM has brought forth many issues like the changing
employer-employee relationship. There is a need felt by the organisations
to link HRM with the organisation’s strategies so that they can attain a
competitive edge in the global market. Today, we see more and more
organisations adopting Strategic Human Resource Management (SHRM).
SHRM is nothing but a combination of strategy and HRM. It refers to linking
of human resources with strategic goals and objectives to achieve goals of
an organisation.
18
In an organisation, SHRM means accepting and involving the HR function

as a strategic partner in the formulation and implementation of the
company’s strategies through HR activities.
Various factors like globalisation, increased technological change, diversity

in the human resources of an organisation and a highly competitive
environment have led to the development of SHRM.
In SHRM, HR department is involved with the organisation’s top

management in the strategic process.
SHRM helps in improving the performance of the organisation and its

employees, enhancing the customer satisfaction, increase in innovation and
in providing a competitive advantage.
Human Capital Management (HCM)
HRM might soon be replaced by Human Capital Management (HCM). HRM

treats people as an organisational resource, that can be made, drawn on
and used to accomplish a task. But under HCM, employees are treated as if
they are investors of their own capital. In short, organisations do not own
this human capital but they can rent it from the employees.
In HRM, employees are seen as value addition but here they will be seen
as value creation. HCM plans to integrate people and business strategy
thus driving and accelerating the business plan.
This is a fairly new concept and is yet to gain acceptance in management

circles. This works best where the organisation is people-oriented and the
size of the organisation is large.
Ajay Verma: Oh, we have reached. Give me a few hours, Rajesh. You can
park the car and have your lunch. You can come back here at 5 p.m.
Rajesh: Ok, Sir. I will have my lunch and wait for you here.
19
1.8 SUMMARY
Human Resource Management (HRM) is a management function that helps
an organisation to manage its Human Resources. The process of HR in an
organisation consists of manpower planning, job analysis, recruitment and
selection, motivation techniques, training and development, employee
welfare, performance appraisal, compensation administration and
separation. HRM in an organisation is affected by various factors in the
external environment (technological changes, globalisation, legal, political,
etc.), and internal environment (organisational strategy, unions,
organisational culture, etc.). HRM in the near future will be replaced by
Strategic HRM, and in the distant future, it may also be replaced by HCM.
1.9 SELF ASSESSMENT QUESTIONS

1. What is HRM? What are its functions? How is the process of HRM
structured in an organisation?
2. Trace the evolution of HRM.
3. What are the factors that affect HRM?
Multiple Choice Questions
1. __________ includes job evaluation, performance appraisal, and pay

and benefits.
(a) Monitoring
(b) Measuring
(c) Movement
(d) Management
2. HRM is an ongoing process and it starts from __________.

(a) Products
(b) Job Analysis
(c) Quality
(d) Content
20
3. Manpower planning is the process of __________ an organisation’s

future demand for, and supply of, the right type of people in the right
manner.
(a) pain
(b) fame
(c) forecasting
(d) kick
4. Recruitment involves attracting and obtaining applications from eligible

__________.
(a) goods
(b) price
(c) pain
(d) job-seekers
5. Selection is the process of choosing the right individuals for a job in an

organisation out of the pool of job __________.
(a) applicants
(b) price
(c) funds
(d) name
6. Motivation undertakes to understand and change an employee’s

behaviour for increase in the employee’s __________.
(a) responsible
(b) performance
(c) fake
(d) gate
7. Training and Development refers to the imparting of requisite skills,

abilities and knowledge to an __________.
(a) game
(b) product
(c) employee
(d) perfect
21
8. Internal __________ consists of forces like strategy, unions and

organisational culture.
(a) responsible
(b) profit
(c) complex
(d) environment
9. Human Resource Management is basically the __________ of human

resources in an organisation.
(a) management
(b) funds
(c) land
(d) sand
10.Job Analysis is the process of collecting job-related __________ which

will then help in the designing of a job.
(a) funds
(b) information
(c) nutrient
(d) stamina
Answers:
1. (a), 2. (b), 3. (c), 4. (d), 5. (a), 6. (b), 7. (c), 8. (d), 9. (a), 10. (b).
22
Related Reading
Role of HR in Brand Management
(Courtesy – Dinesh V. Divekar, The Times of India – Ascent)
The concept of branding or brand management is exclusively the forte of

marketing. Noted marketing guru Philip Kotler defines brand as any name,
term, sign or design, or a combination of them intended to identify the
goods and services of one seller or group of sellers and differentiate from
those of competitors. Kotler further states that, in essence, a brand
identifies a seller or maker.
The definition applies exclusively to the product or service. So, what is the
role of HR in branding then? Marketing may do branding of product or
services; HR can do the branding of the people of a company or the
company itself.
Branding helps companies in creating images of their products or services.

Every brand has a recall value. For example, as soon as we say we have a
Sony Walkman or a Rolls Royce car, etc., do you remember when you hear
Benz Mercedes? A very strong and sturdy product. Just as products or
services have recall value, a company’s employees also have their recall
value. This recall value is important when you talk about the employees of
a particular company also. Sooner, someone says I am an employee of an
MNC, our thought process is different. However, if someone says that I am
an employee of some public sector company, immediately our thought
process changes. If someone says that I am a secretary with some
Government, our thought process is still different. Why does our thought
process change? Our thought process is a result of the image that we have
in our mind.
So, your company is what your employees are. The way they act, react or
respond depends on recruiting the right people and grooming them in the
initial days of their career. This is where the HR department has a great
role to play in Brand Management. They can draw out a systematic plan as
to how to manage the perceptions of the job candidates in the job market.
HR can create the brand value in the job market.
23
Brand value depends on:
a. What your current employees talk in the job market?
b. What your ex-employees talk in the job market?
c. What your suppliers talk in the job market?
d. How many employees are involved in minor/major crimes?
e. How many employees write research articles in various forums?
f. How your current, or ex-employees, vent their frustration in general

forums?
Let us discuss how the HR can promote the brand of their company. Few
things that the HR can do to encourage their employees are:
a. Encourage senior managers to write articles in newspapers, trade

magazines, etc.
b. Encourage seniors to participate in seminars conducted by CII, FICCI or

chapters of AIMA.
c. Seniors can also share their experiences in the evening guest lectures
conducted by NIPM, NHRD, etc.
d. Seniors can give interviews in Times Ascent (published on every

Wednesday by Times of India).
In each of the above cases, they may represent in their personal capacity;
however, each time their company’s brand is taken to the respective
organisation or forum automatically.
If you look at activities of Mr. N.R. Narayana Murthy, he has promoted the
brand of Infosys in a big way. Many times, he has attended functions to
give a mere 10 minutes speech. But to give speech of 10 minutes, he
commuted for about 2 hours, to and fro!
Till the 20th century, it was adequate to take care of customers. The 21st
century has thrown one more challenge on managing the job market. The
perceived image of the company among the job candidates plays an
important role. It helps attracting candidates in the job market to join your
company.
24
As the brand image grows, so does the challenge of employee retention.

However, brand image helps in managing attrition as well. One is that you
get a constant pool of candidates without bothering too much about the
replacement.
25
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
26
JOB ANALYSIS
Chapter 2
Job Analysis
Objectives

• Nature and importance of Job Analysis
• Process of job analysis in an organisation
• Different methods used in collecting job-related data
• Nature of Job Design
• Factors affecting job design
Structure:
2.1 Nature and Importance of Job Analysis
2.2 Process of Job Analysis
2.3 Different Methods of Collection of Job Data
2.4 Problems Faced in Job Analysis
2.5 Nature and Importance of Job Design
2.6 Factors Affecting Job Design
2.7 Summary
27
JOB ANALYSIS
The story continues……..
The next day after the visit to the factory, Rajesh came to Ajay Verma’s
house to chauffeur him to the office. On the way ….
Rajesh: Good Morning, Sir.
Ajay Verma: Good Morning, Rajesh.
Rajesh: Sir, may I ask you a question?
Ajay Verma: Of course, you may.
Rajesh: I always wanted to know how the jobs of the employees are
designed in an organisation. Can you please explain it to me?
Ajay Verma: Yes, of course. The jobs of the employees are designed after
the job analysis is done. Let me explain….
2.1 NATURE AND IMPORTANCE OF JOB ANALYSIS

Job analysis refers to the process of collecting information about a job. It
involves collection of information that includes knowledge, skill and ability
an employee possesses to perform a job effectively. Job analysis is useful
for managing all the personnel activities. Job-related data is useful in
human resource planning, hiring and training of employees, in deciding the
compensation and in the performance appraisal.
Human Resource Planning
Human resource planning determines as to how many and what kind of

personnel will be needed in the future. The number and the kind of
personnel are determined by the number of jobs which need to be staffed.
Job-related information is, therefore, very necessary for human resource
planning.
28
JOB ANALYSIS
Recruitment and Selection
The objective of hiring of employees is to match the right people with the
right jobs. For this objective to be achieved, the job analysis needs to be
done. A human resource manager needs to have an understanding of the
types of skills required for the different types of jobs so that he can look at
the correct sources while recruiting. This understanding also helps the
manager while selecting the candidates, as he can match the job
requirements with the qualifications of the candidate.
Training and Development
Job analysis is useful for a human resources manager as it helps him to

know about the requirements, in terms of knowledge and skills, to perform
a job. Training and development programmes are designed on the basis of
the job requirements.
Remuneration
Job analysis helps in determining the relative worth of each job for the
purpose of establishing salary and wage structure. This, in turn decides,
the amount of remuneration depending on the grade of the job that the
employees occupy. Job analysis also determines the fringe benefits, bonus
and other benefits.
Performance appraisal is the assessment of the actual performance of the

employee against certain expectations or objectives laid down for him. It is
the basis for awarding promotions, transfers and assessment of training
needs. Job analysis helps fix standards for performance against which an
individual employee’s actual performance is assessed.
Safety and Health
Job analysis also helps in uncovering and identifying hazardous conditions

and unhealthy environmental factors like heat, noise, fumes and dust so
that corrective actions can be taken to minimise and avoid the possibility of
human injury.
29
JOB ANALYSIS
Activity A
What is Job analysis? Describe the importance of job analysis in an

organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
Ajay Verma: I hope you have understood the importance of job analysis.
Rajesh: Yes, Sir!
Ajay Verma: Good! Let me now explain the job analysis process….
2.2 PROCESS OF JOB ANALYSIS
Fig. 2.1: Job Analysis Process
Strategic Choices
An organisation has to make choices regarding the employee involvement,

the level of details of the analysis, timing and frequency of analysis,
orientation of the job analysis and the sources that will be used for
collecting the job data.
• Employee Involvement: Employees are asked to supply important
information about the contents of a job, as they are the ones that are
most familiar with the job. Hence, the organisation has to decide how
much the employees will be involved. Too much involvement may result
in an employee inflating his job duties and responsibilities, more than it
actually is. Too little involvement may result in developing suspicion
among the employees regarding the motives of the job analysis. It can
also lead to inaccurate and incomplete information.
30
JOB ANALYSIS
• Level of Analysis: The level of analysis affects the nature of the data
collected. The nature of the jobs being analysed determines the level of
details in job analysis. As the nature of a job of a security guard is
different from the job of a Human Resource Manager, even the level of
analysis of these two jobs will be different. The level of analysis also
depends on the purpose for which the job-related data is being collected.
• Timing and Frequency of Analysis: Another strategic choice that an
organisation has to make is regarding the timing and frequency of job
analysis. When an organisation is new, job analysis is initiated for the
first time. Subsequently, after the organisation is established, job
analysis is conducted whenever a new job is created, or whenever there
is a significant change in the job due to changes in technology or
methods, or when the organisation feels that there is an inequality
between the job demands and the remuneration it pays.
• Orientation of the job Analysis: There are two approaches to
conducting a job analysis. Job analysis can be done by looking at what
has happened in the past and what is currently being done. This
orientation is referred to as the past-oriented approach. On the other
hand, if an organisation is changing rapidly due to fast growth or
technological changes, then the approach to the job analysis should be
future-oriented. In such an approach, the organisation anticipates the
future changes and conducts the job analysis, keeping this change in
mind.
• Sources of Job Data: The organisation should make a choice regarding
the source of job data to be used. For an established organisation, the
first source of job-related data is the job analysis data that already
exists. The various sources of job data are the employees, supervisors,
job experts, existing job data, equipment maintenance records, training
manuals and other job training materials. An organisation has to keep
two things in mind while deciding the sources of job data to be used –
(i) the sources should be most recent, and
(ii) several sources of information should be used.
31
JOB ANALYSIS
Gather Information
The organisation has to decide as to what type of data is to be collected,

which methods are to be used for data collection, and who should collect
the data. Normally, trained job analysts, supervisors or the employees are
used to collect the data. The type of method to be used for data collection
depends on important factors like the purpose of the job analysis and the
status of the current job analysis process. For example, a new organisation
may appoint a job analyst who will select the most suitable method for
data collection. Well established organisations should review the job
analysis information over a period of time as jobs change due to many
factors like changes in technology and changes in products.
Process Information
Once the job information has been collected, it is processed so that it can
be useful to various personnel functions. Specifically, job-related data is
used to prepare job description and job specification.
Job Description
Job description is a written statement showing job title, tasks, duties and
responsibilities involved in a job. It also prescribes the working conditions,
hazards, stress and relationship with other jobs. Thus, a job description
contains the following information:
• Job title, code number, and department/division.
• Job contents in terms of activities or tasks performed.
• Job responsibilities towards effective performance of the job.
• Working conditions specifying specific hazards/stress.
• Social environment prevailing at the workplace.
• Extent of supervision given and received.
• Relationship with other jobs – vertical, horizontal, and diagonal.
32
JOB ANALYSIS
Advantages of Job Description
a. It helps the supervisors in assigning work to the subordinates so that he

can guide and monitor their performances.
b. It helps in recruitment and selection procedures.
c. It assists in manpower planning.
d. It is also helpful in performance appraisal.
e. It is helpful in job evaluation in order to decide about rate of

remuneration for a specific job.
f. It also helps in chalking out training and development programmes.
Job Specification
Job specification summarises the human characteristics needed for

satisfactory job completion. It tries to describe the key qualifications
someone needs to perform the job successfully. It spells out the important
attributes of a person in terms of education, experience, skills, knowledge
and abilities to perform a particular job. The job specification is a logical
outgrowth of a job description. For each job description, it is desirable to
have a job specification. This helps the organisation to find what kinds of
persons are needed to take up specific jobs. The personal attributes that
are described through a job specification may be classified into three
categories:
a. Essential attributes: Skills, knowledge and abilities a person must

possess.
b. Desirable attributes: Qualifications a person ought to possess.
c. Contra-indicators: Attributes that will become a handicap to

successful job performance.
A job specification can be developed by talking with the current job holders
about the attributes required to do the job satisfactorily. Opinions of
supervisors could also be used as additional inputs. Checking the job needs
of other organisations with similar jobs will also help in developing job
specifications.
33
JOB ANALYSIS
A specimen Job Specification of Compensation Manager is given below:
MBA with specialisation in HRM/MA in Social Work/PG

Education
Diploma in HRM/MA in Industrial Psychology.
At least 3 years’ experience in a similar position in a large

Experience
manufacturing company.
• Knowledge of compensation practices in competing

Skill, Knowledge
industries, of job analysis procedures, of compensation
and Abilities
survey techniques, of performance appraisal systems.
• Skill in writing job descriptions, in conducting job
analysis interviews, in making group presentations, in
performing statistical computations.
• Ability to conduct meetings, to plan and prioritise work.
Work Orientation
The position may require up to 15% travel.
Factors
Age Preferably below 30 years.
Preparing a job specification is always not easy. Regarding the human

resource requirements of a job, there is scope for disagreement. For a
clerical job, one bank may demand high school education; another bank
may demand the services of graduates or even postgraduates. Differences
may also crop up when stating an attribute as a ‘desirable’ or ‘essential’
qualification. To avoid further confusion, while writing any job specification,
it is important to list only those skills, knowledge and abilities essential for
job performance.
34
JOB ANALYSIS
Advantages of Job Specification
1. It is helpful in preliminary screening in the selection procedure.
2. It helps in giving due justification to each job.
3. It also helps in designing training and development programmes.
4. It helps the supervisors for counselling and monitoring performance of

employees.
5. It helps in job evaluation.
6. It helps the management to take decisions regarding promotion,

transfers and giving extra benefits to the employees.
Activity B
Describe the process of job analysis in an organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
Ajay Verma: Can you figure out your job description and job specification?
Rajesh: I will try, Sir. My job description is to be a driver to the Vice

President of Human Resource department, Globodyne Ltd. And my job
specification must have been for a person who was more than 18 years of
age and who has studied up to the school level.
Ajay Verma: Fantastic! Let me explain the various methods of collecting

job data.
35
JOB ANALYSIS
2.3 DIFFERENT METHODS OF COLLECTION OF JOB DATA

The different methods of collecting job-related data are described below:
Interview
In this method, the job analyst interviews the employee and his supervisor
to get information about the job. Normally, a structured interview form is
used to record the information provided by the employee and the
supervisor. During the interview, the job analyst uses his own judgement
about the information to be included in the form. Though the interview
method provides a personal touch to the job collection process, it is a time-
consuming process. The interview may also be subject to bias – bias on the
part of the interviewer. Also, the employee may provide inaccurate data
regarding the job. The effectiveness of the interview method depends upon
the interviewer and on the ability of the employee to provide meaningful
responses.
Observation
In this method, the job analyst observes the employee at work and records
what he does, how he does, and how much time is required for completion
of a given task. This method is very simple and the data collected is very
accurate. On the other hand, it is a time-consuming method. This method
can be applied only to jobs which are of a repetitive nature. It can be
applied to unskilled and semi-skilled jobs, and not to skilled jobs. Also, the
job analyst has to be trained for this method, and the training involves
additional cost.
Questionnaire
In this method, employees fill in a structured questionnaire provided to

them. These questionnaires are then approved by their supervisors. The
questionnaires provide information on the job title of the employee, the job
title of the employee’s supervisor or employee, the job titles and the
number of staff reporting to the employee, and a list of the duties that
the employee performs. This method is useful as it can collect information
on a large number of jobs in a short period of time. This helps in saving
time. The staff required to conduct this programme is very minimal. Also,
all the employees can participate in this method. However, this method
also suffers from certain drawbacks. The information provided may not be
36
JOB ANALYSIS
accurate. Also, follow-ups may be required to clarify inadequately filled

questionnaires. In addition to this, the questionnaire may be subject to
misinterpretation by the job analyst.
Job Performance
In this method, the job analyst actually performs the job. The analyst
receives first-hand experience of the contextual factors on the job including
physical hazards, social demands, emotional pressures and mental
requirements. This method is useful for jobs that can be easily learned. It
is not suitable for jobs that are hazardous or which require extensive
training.
Checklist
This method is similar to the questionnaire method. In this method, the

response sheet contains few subject judgements, and the responses are
mainly ‘yes’ or ‘no’ variety. Checklists cover many activities and the
employee ticks only those tasks that are included in their jobs. The
checklist is normally prepared by a specialist who collects all relevant
information about the job concerned. This information is obtained by
asking supervisors, industrial experts and those familiar with the work.
After the checklist is prepared, it is sent to the employee, who then ticks
the relevant tasks that he performs in the job. Also, the employee is asked
to write any additional task that is not listed in the checklist. The checklist
is useful in large firms that have a large number of employees assigned to
a particular job. However, this method is costly, and therefore, not suitable
for small firms.
Technical Conference Method
In this method, the job analyst approaches the supervisors who possess
extensive knowledge of the job. These experts provide details about the
job. Normally, a conference is held so that all the supervisors can attend at
the same time and provide the relevant job-related data. It is a good
method of collection of job data but it lacks accuracy as the employees are
not involved in the collection of the information.
37
JOB ANALYSIS
Diary Method
This method required the employees to record in detail their activities each
day. If the employees record the activities faithfully, the data obtained is
accurate. Also, it eliminates any errors due to memory lapses that an
employee makes while answering a questionnaire or a checklist. However,
this method is time-consuming as the recording has to be spread over a
number of days. This also reduces the production time and thereby the
productivity of the employee.
Critical Incidents
This method is a qualitative approach to obtain specific behaviourally

focused description of work. In this method, the employees are asked to
describe several incidents based on their past experience. The incidents
collected are analysed and classified according to the job areas they
describe. The job requirements become clear once the analyst
differentiates between effective and ineffective behaviours of the
employees on the job. The process of collecting is a lengthy and a time-
consuming process. It is also very difficult to classify these incidents as
several employees might have dissimilar incidents. Also, the analyst must
possess excellent analytical skills to translate the content of these incident
descriptions into meaningful statements.
2.4 PROBLEMS FACED IN JOB ANALYSIS

Some of the major problems that may crop up while conducting job
analysis are:
Support from the Top Management
Support from the top management is very crucial. For a job analysis to be
successful, the top management has to make it clear to all the employees
that their participation is extremely important. Unfortunately, in most of
the cases, it is not communicated by the top management, thus rendering
the entire process ineffective.
38
JOB ANALYSIS
Relying on a Single Source or Method
Many times, the organisations rely only on one method of collecting job-
related data or they might rely only on one source, either employees or
their supervisors, for collecting job data. Job analysis is most effective
when multiple sources of data are used, preferably a combination of
employees, supervisors and industrial experts. Also, when organisations
use more than one method of collecting job-related data, the job analysis
is more accurate.
No Training Provided to Employees
Employees or the job holders are a great source of information about the
job. But they are not trained to generate quality data which can be useful
for job analysis. In addition to this, employees are not made aware of the
importance of the data. As a result, when the job data is collected, the
employees either do not participate fully or they do not participate at all.
Distortion of Activities
Many times, employees perceive job analysis as a threat to their jobs.

Hence, they are prone to distort the data by inflating their activities and
duties. This results in inaccurate job data which may lead to the
organisations over-compensating these employees.
Activity C
Describe the various methods used to collect job-related data in an

organisation. List down some of the problems faced while conducting job
analysis.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
Rajesh: That was wonderful, Sir! Thank you, Sir!
Ajay Verma: You are welcome! But, I have not finished. Let me explain
job design and the various factors that affect it...
39
JOB ANALYSIS
2.5 NATURE AND IMPORTANCE OF JOB DESIGN

The next logical step, after job analysis is completed, is job design. Job
design involves efforts to organise tasks, duties and responsibilities into a
unit of work so as to achieve certain objectives. Job design involves three
steps:
a. Specification of individual tasks.
b. Specification of the method/methods to perform these individual tasks.
c. Combination of tasks into specific job to be assigned to individual

employees.
The first and the third step determines the content of the job while the
second step shows how the job must be performed.
While designing a job, the organisational requirements and the individual

needs of the employee must be considered. This is very important as it has
a critical impact on organisation’s and employee’s objectives. From an
organisation’s viewpoint, the way tasks, duties and responsibilities are
grouped can affect productivity and costs. Jobs that are not satisfying or
are too demanding are very difficult to fill. This leads to a higher employee
turnover (employee attrition). For an employee, motivation and job
satisfaction are affected by the match between job factors (job content and
rewards) and personal needs. Therefore, a well-thoughtout job design can
help both the organisation and its employees achieve their objectives.
Poorly designed jobs lead to lower productivity, high employee turnover,

absenteeism, sabotage and other problems.
In future, the survival and the growth of an organisation will depend on

how well a job has been designed. As the number of new employees
entering the labour market slows and the international competition
increases, well designed jobs will become even important in attracting and
retaining a motivated workforce, which will be capable of producing high
quality products and services.
40
JOB ANALYSIS
2.6 FACTORS AFFECTING JOB DESIGN

Job design is affected by organisational, environmental and behavioural
factors. A well designed job will make a job productive to the organisation
and satisfying to the employee.
Organisational Factors
Organisational factors include the following factors:
Job Design
Job design requires the assembly of a number of tasks into a job or a

group of jobs. A task consists of three elements:
a. Planning: deciding the course of action, timing and the resources

required.
b. Executing: carrying out the plan.
c. Controlling: monitoring the elements for each of the tasks involved.
An individual may carry out one main task. Task functions may be split
between a team working closely together or along an assembly line.
Complexity in a job may be a reflection of the number and variety of tasks
to be carried out, or the range and scope of decisions that have to be made
or the difficulty of predicting the outcome of decisions.
Work Flow
The flow of work in a firm is strongly influenced by the nature of the

product or services. Normally, if the work is to be done efficiently, the
product or service suggests the sequence of jobs to be done. After the
sequence of jobs is determined, the balance between jobs is established.
Balance of jobs refers to the time and the workforce that will be involved in
completing a particular job.
41
JOB ANALYSIS
Ergonomics
Ergonomics is concerned with designing and shaping jobs to fit the physical
abilities and the characteristics of individuals so that they can perform their
jobs better. Nature of job remains the same, but the location of tools,
switches, computers and other facilities is changed to make the employee
feel comfortable and handle the job in a much better manner.
Work Practices
Work practices are set ways of performing work. Till recently, work
practices were determined by time and motion study, which studied the
standard time needed to complete a given job. Failure to consider work
practices can have undesirable outcomes such as resistance from the
employees.
Environmental Factors
Environmental factors include the following factors:
Employee Abilities and Availability
Efficiency consideration must be balanced against the abilities and

availability of the people who are to do the work. New employees lack the
experience to handle specific tasks of the organisation. While designing the
jobs, the ability and the availability of the employees must be considered.
Change in Expectations of Employees
Nowadays, the employees are more educated, knowledgeable and aware

about their individual objectives and goals. This in turn translates to
employees having high expectations from their jobs. Job design has to
meet these changes in the expectations of the employees.
Globalisation
Globalisation has made it possible for companies to set up units in different

parts of the world. In such a scenario, a multinational organisation tends to
design jobs keeping in view the benefits of standardisation in mind. This
leads to a neglect of the national and cultural differences. Hours of work,
holidays, vacations, religious beliefs, management styles and employee
attitudes are some of the differences that can affect the design of jobs
across international borders. Failure to consider these expectations can
42
JOB ANALYSIS
create dissatisfaction, low motivation, hard-to-fill openings and a low

quality of work life.
Behavioural Factors
Behavioural factors are concerned with human needs and the requirement
to satisfy them. Individuals find jobs challenging and satisfying only when
the following factors are considered:
Feedback
Employees need to receive meaningful feedback about their performance.

They need to know whether the job that they are doing plays a significant
part in the overall operations of the organisation.
Autonomy
Autonomy refers to being responsible for what one does. Jobs that give
employees authority to make decisions will increase an employee’s self-
esteem. Absence of autonomy can cause employee’s apathy or poor
performance.
Use of Abilities
An employee must perceive that the job is requiring them to use their
abilities they possess. If an employee perceives that a job is not making
use of his abilities, it might lead to low motivation.
Variety
Lack of variety may cause boredom. This in turn leads to fatigue which
causes mistakes. While designing a job, the job designer should ensure
that there is sufficient variety in the jobs. Too little variety causes boredom
and too much of variety may lead to non-completion of the jobs.
Ajay Verma: So Rajesh, can you summarise our chat?
Rajesh: Yes, Sir! To summarise our chat, Job analysis is ………..
43
JOB ANALYSIS
2.7 SUMMARY
Job Analysis is a process which involves collection of information regarding
the knowledge, skill and ability an employee possesses to perform a job
effectively.
It is useful for all personnel activities like human resource planning, hiring
and training of employees, deciding the compensation and for appraising
the performance of employees. Job analysis process consists of five steps.
They are:
1. making strategic choices,
2. gathering of information,
3. processing of information,
4. preparation of job description and
5. job specification.
Some of the methods used in job analysis are questionnaire, checklist, jot
performance, observation and interview.
For an effective job analysis, the support of the top management and the
wholehearted participation of the employees is a must. Job design involves
efforts to organise tasks, duties and responsibilities into a unit of work so
as to achieve certain objectives. A well designed job is the key to a
company’s survival and growth.
Job design is affected by organisational, environmental and behavioural

factors.
44
JOB ANALYSIS

1. What is Job analysis? Explain the importance of job analysis in an
organisation.
2. What are the various steps that are involved while conducting job
analysis?
3. Explain job description and job specification.
4. List down and explain the various methods used in collecting job data.
What are some of the problems faced while conducting job analysis in
an organisation?
5. Explain job design and its importance. Describe the various factors
affecting job design.
1. Human resource planning determines as to how many and what kind of

____________ will be needed in the future.
(a) friends
(b) land
(c) personnel
(d) stand
2. The objective of ___________ of employees is to match the right

people with the right jobs.
(a) complex
(b) planning
(c) trade
(d) hiring
3. Job analysis is useful for a Human Resources ____________ as it helps

him to know the requirements, in terms of knowledge and skills, to
perform a job.
(a) Manager
(b) Peon
(c) Guard
(d) Trader
45
JOB ANALYSIS
4. Training and development programmes are designed on the basis of the

____________ requirements.
(a) social
(b) job
(c) local
(d) focal
5. Job analysis helps fix ___________ for performance against which the
individual employee’s actual performance is assessed.
(a) main
(b) banks
(c) standard
(d) trade
6. The level of ___________ affects the nature of the data collected.

(a) banks
(b) guide
(c) main
(d) analysis
7. Job ___________ also determines the fringe benefits, bonus and other
benefits.
(a) analysis
(b) service
(c) trade
(d) marketing
8. The organisation should make a choice regarding the source of job

____________ to be used.
(a) function
(b) data
(c) sector
(d) section
46
JOB ANALYSIS
9. The job____________ is a logical outgrowth of a job description.

(a) enhanced
(b) separate
(c) specification
(d) break
10.Job analysis refers to the process of collecting information about a

____________.
(a) burden
(b) liability
(c) fun
(d) job
Answers:
1. (c), 2. (d), 3. (a), 4. (b), 5. (c), 6. (d), 7. (a), 8. (b), 9. (c),

10. (d).
47
JOB ANALYSIS
Related Reading
Critical Thinking – The Skill for the 21st Century Workforce
(Courtesy – Sunitha Murthy, The Times of India – Ascent)
Critical thinking is neither an abstract nor a difficult skill to attain.

At the most basic level, it is the process of identifying and
evaluating evidence relevant to decision-making.
Want to know the success mantra to excel at your workplace? Think

Critical. Critical thinking skill is the answer for the 21st-century workforce.
According to a survey, HR professionals cited that Critical Thinking would
become the number one skill of increasing importance in the next five
years.
Critical thinking is neither an abstract nor a difficult skill to attain. At the

most basic level, it is the process of identifying and evaluating evidence
relevant to decision-making. Critical thinking goes beyond mere logic. It
represents the ability to become aware of one’s own biases in thinking that
governs our decision-making capabilities. This ability results in objective
evaluation of information to reach a conclusion. Critical thinking is about
how you think and not what you think. It is a process and not an outcome.
Thus, Critical thinking involves the thinker passing through steps such as
encountering a triggering situation or problem-event, the knowledge about
this event that leads to exploration of alternative solutions, the evaluation
of these alternatives on the basis of available evidence, finally leading to
taking a decision about the situation or event.
Critical thinking cuts across boundaries of designations and domains. It has

relevance for all. Every professional benefits from thinking better.
Therefore, the need of the hour is to acquire this skill to take one’s logical
thinking process to the next level. However, most of us are vulnerable to
‘thinking traps’ or fallacies in thinking. Some common fallacies or
erroneous beliefs that come in the way of thinking critically are:
a. Fallacies of relevance: Arriving at a conclusion/decision due to appeal

to authority/force.
b. Fallacies of insufficient evidence: Fallacies of insufficiency are cases

where insufficient evidence is provided in support of a claim.
c. Fallacies of inconsistency: Arguing from inconsistent statements, or
to conclusions that are inconsistent with the premises.
48
JOB ANALYSIS
d. Fallacies of inappropriateness: Fallacies of inappropriate

presumption are cases where one has explicitly or implicitly made an
assumption that is not reasonable to accept in the relevant context.
To apply Critical thinking is to stay grounded in objectivity, thereby

significantly reducing the impact of thinking traps. In our day-to-day living,
we can improve our Critical thinking skills by following a mental roadmap
of steps to take to arrive at well-balanced conclusions – consider facts,
examine the relevance of the facts to the situation to get clarity on the
situation, weigh the alternatives, and finally integrate information to arrive
at a conclusion.
Practicing Critical thinking at the workplace is of utmost importance as it

has a cascading effect on various decision-making factors, the most
important being strategic thinking, problem solving, planning and
organising. Going by the competency matrix set for managers in most
organisations, among the most common attributes figuring in the
competency bucket are abilities of problem solving, decision-making,
planning and organising.
But the question is do organisations really adopt objective measures to

assess professionals on these competencies? Current HR practices tend to
focus on assessing abilities at the entry level of recruitment. Abilities
assessed at this level are of a very general nature and pertain to
parameters such as ability to learn a new task, language skills and some
basic analytical skills. There may be an implicit assumption pervading the
HR thought process that needs to be brought out – testing the ability of
mid- to high-level management is not required as employees functioning in
these levels of management will have the necessary skills to think better
and drive sound decisions for their organisations.
49
JOB ANALYSIS
In today’s highly competitive markets, clients, projects, deadlines and

targets drive day-to-day operations and long-term boardroom decisions in
organisations. A floor manager, team leader or vice president – all need to
think on their feet and offer solutions that optimise the business prospects
of the organisation. Critical thinking leads to better decisions. Both
managers and leaders should be able to pick out critical data from a sea of
information and take sound decisions based on it. Hence, workplace
assessment of Critical Thinking is crucial in creating the right work
environment that offers sustained solutions driving positive growth.
The time is right for a paradigm shift in thinking within the HR community.
Talent assessment needs to be a blend of both the right kind of personality
and the right kind of ability to lead from the front. Critical thinking needs to
be recognised as an essential skill in organisations if we are to become
successful players in a globalised business arena.
50
JOB ANALYSIS
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
51
MANPOWER PLANNING
Chapter 3
Manpower Planning
Objectives

• What is Manpower planning?
• Various factors affecting manpower planning
• Process of manpower planning in an organisation
• Importance of manpower planning
• Various barriers faced by an organisation while planning the manpower
Structure:
3.1 Manpower Planning
3.2 Process of Manpower Planning
3.3 Importance of Manpower Planning
3.4 Barriers to Manpower Planning
3.5 Summary
After a few hours, Ajay Verma returns to the car.
Ajay Verma: Arre Rajesh, let’s go back to the office.
Rajesh: Yes Sir.
Ajay Verma: This visit was quite interesting. I am wondering whether we

are going on the right path in manpower planning.
Rajesh: Sir, what is manpower planning?
52
MANPOWER PLANNING
3.1 MANPOWER PLANNING

Manpower Planning or Human Resource Planning is the process of
forecasting the future demand for, and supply of, the right type of people in
the right number. HR activities like recruitment and selection, training and
development, compensation, appraisal and labour relations are derived
from Manpower Planning.
Manpower planning, if used properly, leads to the maximum utilisation of

human resources, reduces excessive labour turnover and high
absenteeism; improves productivity and aids in achieving the objectives of
any organisation. If it is not used properly, it leads to disruption on the flow
of the work, lower production, less job satisfaction, high cost of production
and a constant problem for the management personnel. For an individual,
it is important because it helps him to improve his skills, and utilise his
capabilities and potential to the fullest. For an organisation, it is important
because it improves its efficiency and productivity.
Manpower planning is influenced by several factors. The most important

factors are:
(a) Type and strategy of organisation.
(b) Growth cycle of an organisation.
(c) Environmental uncertainties.
(d) Labour market.
Type of an Organisation
The type of an organisation is important because it determines the number

of processes required, and the number and type of staff required. A
manufacturing organisation will have more processes than a service-
oriented organisation. For example, a company like Godrej and Boyce will
have to plan for manpower requirements for its manufacturing processes
as well as for its service processes. On the other hand, Vodafone – a
cellular service provider – will plan only for its service processes. The
manpower demand for Godrej will be a combination of unskilled and skilled
manpower, whereas Vodafone’s manpower demand will for skilled
manpower.
53
MANPOWER PLANNING
Growth Cycle of an Organisation
In the early cycle of an organisation, manpower planning may not have an

importance as the organisation focuses on its entry into the market and its
main focus is the product or service development.
Manpower planning also depends on the growth of the organisation.

Manpower planning is needed when the organisation enters the growth
phase. Internal development of people gets more importance as there is a
need to keep up with the growth.
A matured organisation is less flexible and growth slows down. The

workforce becomes old as fewer younger people are hired. There is less
flexibility and innovation in manpower planning.
In the decline stage, manpower planning is done for layoffs, retrenchment

and retirement.
Environmental Uncertainties
Political, social and economic changes affect all organisations. Manpower

planners handle these changes by carefully formulating policies for
recruitment, selection, and training and development. Also, companies
operating in an environment which undergoes many changes have to
formulate plans to accommodate these changes. For example, companies
in the Information Technology field have to plan according to the various
technological changes; else, they will not survive in the fiercely competitive
market.
Labour Market
Countries may have a huge population base; the labour market in these
countries may suffer from a lack of talented and skilled professionals. It is
very difficult for organisations to find the right person for the right job at
the right time and hence it becomes important for these organisations to
conduct manpower planning.
54
MANPOWER PLANNING
Activity A
What is manpower planning? List down some of the factors affecting

manpower planning.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
Rajesh: Oh, so, these are some of the factors that affect manpower
planning. Then Sir, what are the benefits of manpower planning?
Ajay Verma: You are so impatient, Rajesh. Let me throw some light on
(laughs) how manpower planning is done…..
3.2 PROCESS OF MANPOWER PLANNING
Fig. 3.1: Manpower Planning Process
55
MANPOWER PLANNING
Organisational Objectives
Objectives of the HR plan are derived from the business objectives, which
have been defined by the top management. From the organisational
objectives, the HR department needs to determine the number and
characteristics of the employees. For this purpose, an organisational chart
is drawn which determines, the number of employees, at what level, which
positions, experience required to fill a particular position, training to be
provided, etc.
Also, the HR department needs to determine the following:
a. Whether vacancies to be filled internally through promotions and

transfers or to be hired from outside.
b. How will the union constraints be handled, if any?
c. How much of the production and operations can be automated?
d. If automated, what is to be done of the employees who will be

displaced??
e. How to ensure that there is a continuous availability of skilled

workforce?
HR Demand Forecast
Demand forecasting is the process of estimating the number and quality of

people required in the future to meet the needs of the organisation.
Demand forecast considers external as well as internal factors. External
factors include competition, economic climate, technological changes, laws
and regulations, etc. Internal factors include budget constraints, new
products and services, organisational structure, employee separations, etc.
Normally, demand forecasting is done on the basis of the annual budget

and long-term corporate plans. For example, in a manufacturing firm, the
sales budget is very essential. On the basis of the sales budget, the
production plan is worked out which provides details on the number and
type of products to be produced. On the basis of this information, the
number of hours to be worked by each skilled category of labour is worked
out. This determines the quantity and quality of employees required.
56
MANPOWER PLANNING
Demand forecasting helps to:
(i) Identify the number of jobs required.
(ii) The mix of employees required to perform the various jobs.
(iii) Avoid unnecessary costs with the correct number of employees.
HR Supply Forecast
Supply forecasting is the process by which management determines

whether it will be able to procure the required number of employees and
the various sources. It measures the number of people that may be
available to an organisation – internally and externally.
Supply analysis is beneficial as it helps in quantifying the number of people

and positions expected to arise in the future and in preventing any
shortages that may arise in the future.
The Supply Analysis covers:
a. Present employees: Analysis of the skills of the employees (non-

managers and managers) is conducted. This helps in providing the HR
department with a ready database and a comprehensive understanding
of the existing capabilities in the organisation. This analysis is also
helpful in identifying employees eligible for promotions and transfers.
b. Internal sources of supply: The analysis helps to identify the internal

sources of supply and whether these sources will be sufficient to meet
the future needs of the organisation. Internal sources of supply could be
through referrals of the employees, children of retired employees, etc.
c. External sources of supply: The analysis also helps in identifying the

external sources of supply, if the internal sources of supply do not meet
the needs of the organisation. The external sources could be
employment exchanges, consultants, college campuses, competitors,
etc.
57
MANPOWER PLANNING
Gap Analysis – Is Demand Equal to Supply?
Once the demand and the supply forecasts are prepared, the HR
department checks whether the demand is met by the supply. If the
demand is more than the supply, then there is a shortage of manpower
and necessary steps like recruitment and selection, training and
development, and retention plans will have to be undertaken. If the supply
is more than the demand, then there is a surplus of manpower and
necessary steps like layoffs, reduced working hours, Voluntary Retirement
Schemes (VRS), pay-cuts, etc. which will have to be undertaken by the
organisation.
Activity B
List down the steps involved in Manpower Planning of any organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
Rajesh: Sir, now can you tell me the benefits of manpower planning?
Ajay Verma: Yes…….. (laughs)
3.3 IMPORTANCE OF MANPOWER PLANNING

Importance of Manpower Planning can be understood through the following
points:
Future Manpower Needs
Manpower Planning is required as it helps in determining future manpower

needs. If proper manpower planning is done, then the company will find
that it is able to handle any changes in its environment. Manpower
planning also helps in succession planning for the middle and top
management.
58
MANPOWER PLANNING
Creating Highly Talented Manpower
Jobs are getting highly specialised and intellectual in nature, as compared

to few years back. As a result of computerisation, nowadays, the skills
required for an employee on the production floor have changed. Also,
nowadays, the manpower consists of qualified and skilled personnel like
MBAs, engineers, etc. Qualified and skilled personnel are known for job
hopping, thus creating shortages in the organisation. Manpower planning
helps to avoid such shortages.
Foundation for HR Functions
From manpower planning, other HR functions like recruitment and

selection, training and development, job analysis, compensation
administration, performance appraisal and feedback, employee welfare,
etc. are derived.
3.4 BARRIERS TO MANPOWER PLANNING

There are also certain barriers to manpower planning:
a. Manpower plans suffer from inaccuracy as it is difficult to prepare long-

range forecasts accurately. There could be changes in economic
conditions, technology, market and labour force conditions which may
make the long-range plans unreliable.
b. Most of the times, operating managers or non-HR managers are not

involved in the manpower planning which renders the planning
ineffective. A successful planning has to involve the efforts of the
operating as well as the HR managers.
c. Imbalance may occur between short-term and long-term HR needs.

Many managers, due to pressures, may focus on getting the work done
while neglecting the long-term need of grooming the people for greater
responsibilities.
d. Manpower planning is like a moving target. Manpower planning is an

art. It is not simply a number crunching process.
59
MANPOWER PLANNING
Fig. 3.2: Ballpark Figures
For example, consider that in month 1, it is proposed to recruit and select

300 employees into the company to be added in existing number of
employees of 2500, and it is also expected that 400 employees are
supposed to be leaving the company by end of month 1.
The starting figure for month 2 would be:
300 + 2500 – 400 = 2400
Although these numbers are simple to compute, in reality, we are not sure
of how many people would join the company and also how many people
would leave the company in any month. Hence, these numbers are more of
“ballpark figures”.
Manpower Planning needs an experienced person’s skill of forecasting the

demand-supply of manpower based on past experience, trends, etc.
Ajay Verma: Oh, here we are. We have reached the office.
60
MANPOWER PLANNING
3.5 SUMMARY
Human Resource Management is a process where people and organisations
are brought together so that the goals of each are met. Manpower Planning
or Human Resource Planning is the process of forecasting an organisation’s
future demand for, and supply of, the right type of people in the right
number. Manpower planning is influenced by factors such as type and
strategy of organisation, growth cycle of an organisation, environmental
uncertainties and labour market.
It involves the following steps:
1. Organisational objectives.
2. Demand forecast.
3. Supply forecast.
4. Surplus or shortage.
It is important as it determines future manpower needs, is a foundation for

other HR functions and is useful in creating highly talented manpower.

1. What are the steps involved in Manpower Planning?
2. Why is manpower planning required?
3. What are the barriers that are faced while planning the manpower
requirements in an organisation?
61
MANPOWER PLANNING
1. For an _________, manpower planning is important because it improves

its efficiency and productivity.
(a) organisation
(b) tension
(c) mention
(d) pension
2. Manpower planning also depends on an organisation’s _________.

(a)last
(b) growth
(c) middle
(d) highest
3. In the _________ stage, manpower planning is done for layoffs,

retrenchment and retirement.
(a) middle
(b) internal
(c) decline
(d) growth
4. Political, social and economic changes _________ all organisations.

(a) possessed
(b) refreshments
(c) resources
(d) affects
5. Demand _________ considers external as well as internal factors.

(a) forecast
(b) complexity
(c) circumstances
(d) casualness
62
MANPOWER PLANNING
6. Demand _________ is done on the basis of the annual budget and long-
term corporate plans.
(a) complex
(b) forecasting
(c) rejoicing
(d) changing
7. VRS means _________ .

(a) Voluntary Retirement Seasons
(b) Voluntary Reservation Schemes
(c) Voluntary Retirement Schemes
(d) Voluntary Requirement Seasons
8. Manpower Planning is required as it helps in determining _________

manpower needs.
(a) past
(b) priceless
(c) complex
(d) future
9. Imbalance may occur between short-term and long-term HR

_________.
(a) needs
(b) internal
(c) higher
(d) lower
10.A manufacturing organisation will have _________ processes than a

service-oriented organisation.
(a) equal
(b) more
(c) less
(d) lesser
Answers:
1. (a), 2. (b), 3. (c), 4. (d), 5. (a), 6. (b), 7. (c), 8. (d), 9. (a), 10. (b).
63
MANPOWER PLANNING
Related Reading
Forecasting Manpower Requirements
(Courtesy – Unnati Narang, The Times of India – Ascent)
With increasing uncertainty in the job markets and thrust on cost cutting, it
is increasingly important for HR managers to plan the demand and supply
of manpower as accurately as possible. Basic to human resource planning,
is the function of forecasting a company’s future demand for employees.
Only then can a company maintain a ready pool of candidates and fill in
vacancies without much loss of time or effort. Forecasting forms the basis
of HR functions today.
Explaining the importance of talent planning and forecasting, Rahul

Kulkarni, Head, HR at Kale Consultants, “Talent forecasting is the most
crucial job of the Human Resources department. Human Resources
department needs to align their strategy according to the needs and vision
of the organisation. HR needs to work proactively with the business and
understand what is in pipeline and revisit the needs on periodical basis. In
the current competitive scenario, the robust talent forecasting will help to
get an edge over the competitor.”
Forecasting is critical to business success. It offers several benefits for the

organisation as a whole. As M.S. Venkatesh, President, Group HR,
Educomp Solutions Group points out, “Forecasting ensures that the
organisational structure is right-sized and there is no short supply of
manpower and excess manpower. This assures better efficiency and
productivity of manpower. Secondly, it ensures that there is no overlap of
roles and there is complete role clarity. It helps plan the recruitment
strategy well in advance to hire the right quality of talent at an optimal
cost and lead time. Forecasting helps in cost optimisation and accurate
budgeting.”
64
MANPOWER PLANNING
Setting Forecasts
Forecasting manpower requirements is driven by the annual business plan

of revenues, sales targets, geographical distribution of business units and
experience of the Business/Function Head and the HR Head who are
responsible for the forecast. Venkatesh explains, “Manpower forecasting is
the job of both the Business/ Function Head and the HR Head approved by
the CEO. Prior to forecasting, it is critical to establish role clarity and Key
Result Areas (KRAs) for every job role in the organisation to ensure the
organisational structure is of the right size. The next step is to understand
the cost of the organisational structure that will deliver the targeted ROI
(Return on Investment) as per the Annual Business Plan. Further, the
forecasting team needs to have the knowledge of men to volume/revenue
target ratios and geographical distribution points.”
What are some of the skills needed for accurate forecasting? Venkatesh
continues, “Managers must understand the business very well. Questions
such as why this person can or cannot do a specific job must be asked and
answered logically. For better results in forecasting, the HR Manager plays
a key role if he/she understands the business equally as a Business/
Function Head.”
Not without Challenges
In spite of the availability of many statistical tools and procedures,

forecasting is not free from errors. Even as a process, it is fraught with
challenges. Kulkarni adds, “The greatest challenge in forecasting is the
resistance by people, business uncertainty, and no clear vision.” Often, the
forecasts made are too high and unachievable. This can render the process
meaningless. Hence, the HR managers must revisit and review forecasts
from time to time. In case the forecasts are released to the public,
especially for big organisations, it is all the more important to give
realistic and even conservative figures. HR managers must have the vision
and the ability to work jointly with business heads.”
Clearly, forecasting, both an art and a science, is a continuous and a joint

exercise. Achieve accuracy in forecasting to achieve extraordinary business
results!
65
MANPOWER PLANNING
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
66
RECRUITMENT, SELECTION, INDUCTION AND ORIENTATION
Chapter 4
Recruitment, Selection, Induction And
Orientation
Objectives

• What is Recruitment
• Importance of recruitment
• Process of recruitment in an organisation
• Various sources of recruitment
• What is selection
• How a selection process is conducted in an organisation
• What is induction
Structure:
4.1 Nature and Importance of Recruitment
4.2 Process of Recruitment
4.3 Various Sources of Recruitment
4.4 Selection
4.5 Process of Selection
4.6 Induction and Orientation
4.7 Summary
67
After a month, Ajay Verma was due for his monthly visit to the factory at
Ghansoli. Rajesh was waiting for him at the gate of his home at Bandra.
Rajesh: Good Morning, Sir.
Ajay Verma: Good Morning, Rajesh. I am so glad we recruited and

selected you.
Rajesh: Sir, what is recruitment and selection? Are they different? I

thought they meant the same thing.
Ajay Verma: No, Rajesh. They are two different things. Let me explain
them…
4.1 NATURE AND IMPORTANCE OF RECRUITMENT

Hiring of employees is an ongoing process and it is not restricted to the
early stages of an organisation. Employees leave the firm for better
opportunities; some employees retire and some employees die. Also, an
organisation grows, merges with/takes over other organisations and also
diversifies into various sectors. All these activities require that new
employees are hired. The hiring of employees stops only when the
organisation ceases to exist.
Recruitment is the process of searching for and obtaining applications for

jobs, so that the right people can be selected from this pool. It refers to
the process of attraction of job seekers to a company through various
media like advertisements in newspapers, job portals, consultants, etc. In
reality, the term recruitment is used for the entire process of employee
hiring including the selection process.
In today’s world, a company’s success or failure depends on many factors.

A key factor of this is the company’s manpower. The quality of manpower is
emphasised today and we can see that through the various programmes
adopted by Human Resource department. Today, the Human Resource
departments and organisations have realised that to develop a qualitative
manpower, a suitable manpower has to be recruited and selected.
68
Recruitment helps a company in the following ways:

• Attract highly qualified and competent people.
• Ensure that the selected candidates stay longer with the company.
• Ensure that there is a match between cost and benefit.
• Help the company create more culturally diverse workforce.
4.2 PROCESS OF RECRUITMENT

The process of recruitment consists of:
Fig. 4.1: Recruitment Process
69
In simple terms, the recruitment process has the four following steps:
1. Communicating to the job market that the company needs people.
2. Applicants apply and company collects all applications.
3. HR shortlist applicants based on Job Specification Sheet.
4. Call letter for interviews sent to shortlisted applicants along with

application blank.
Recruitment Planning
Manpower planning helps in deciding the number of job vacancies, whereas

Job Analysis provides information as to the nature of these vacancies. On
this basis, Human Resource department plans the number of applicants
and the type of applicants to be contacted. Organisations have to attract
more applicants for the vacancies as some of the applicants may not be
suitable for the vacancy.
Strategy Development
Once the number and the type of recruits to be hired are known, Human
Resource department then decides the following:
a. Whether the firms should hire less skilled employees and invest on their
training and development, or whether they should hire highly skilled and
trained professionals. This is known as ‘Make’ or ‘Buy’ where ‘make’
refers to the hiring of less skilled and untrained employees and ‘buy’
refers to the hiring of skilled and trained professionals.
‘Buying’ skilled and trained employees is advantageous as no training

cost has to be incurred. But the cost of remuneration to such employees
is high.
b. The Human Resource department has to decide the method that is to be

used in recruitment and selection process. The Human Resource
department has to decide many things like whether facilities like
teleconferencing is to be used during selection, whether the job seekers
are to be attracted only through newspaper advertisements, whether
consultants is to be used during recruitment and selection, etc.
70
c. The Human Resource department also has to decide from where the
applicants are to be recruited. This depends on the location of the
organisation. If the organisation is located in a city like Mumbai, then
the recruitment is done from the huge pool of job seekers in Mumbai.
But if the organisation is located in Pune, then it will have to look at
attracting job seekers from Pune as well as Mumbai. Most of the
companies located in Pune recruit employees from Mumbai, as the
necessary skilled employees may not be available in Pune.
d. Whether the recruitment is to happen from internal sources (recruit

from within the organisation) or external sources (recruit from outside
the organisation) or a combination of both.
e. The Human Resource department has also to decide when the

recruitment and selection is to happen. This decision depends on the
time taken from when the advertisement is given in the newspaper till
when the candidate reports for work. For example, if the time taken for
the entire recruitment and selection process is 2 months and the
candidate reports for work on 1st July, then the Human Resource
department will advertise for the vacancy on 1st May.
Searching
Once the recruitment plan and strategy are developed, the search process
begins. The search process begins only after the line managers confirm
that they require an employee. Normally, they fill a form and submit it to
the Human Resource department stating that they require an employee for
a job. Also, the company has to decide what type of media is to be used for
broadcasting the recruitment message.
Screening
Screening refers to the scrutinisation and short-listing of applications

received. The purpose of screening is to filter out those applications that
are not suitably qualified for the job. For this purpose, clear job
specifications are a must as the job specifications can be compared with
the knowledge, skills and abilities of the applicants. Interviews and
applications are used to screen walk-ins. Interviews and resumes are used
by campus recruiters and consultants to screen job seekers.
71
Evaluation and Control
Recruitment process is evaluated on the basis of the number of

applications received, the number of candidates who went to the selection
process, the cost of the recruitment process, the number of the candidates
retained after the probation period, and the performance of the candidates
selected.
Activity A
What is recruitment? Describe the process of recruitment in an

organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
4.3 VARIOUS SOURCES OF RECRUITMENT

Sources of recruitment can be classified into internal sources and external
sources. The various sources of recruitment are explained below:
72
Fig. 4.2: Sources of Recruitment
73
INTERNAL SOURCES
Internal sources include present employees, referrals from employees,

former employees and former applicants. Internal recruitment is less costly
than external recruitment. Recruiting from internal sources also increases
the morale of employees, their commitment to the organisation and job
satisfaction. Also, the organisation has a better knowledge of the skills and
abilities of their employees.
Present Employees
Usually, for promotions and transfers, a company prefers its present

employees for these positions. This has several advantages – it builds
morale of the present employees, it is cheaper than recruiting externally,
those who are chosen internally are familiar with the organisation, and if
carefully planned, promotion also acts as a training tool for developing
middle-level and top-level managers. This is the reason why companies
prefer to develop internal talent groups.
Transfers are another way to recruit from present employees. It may be to

another department or to another location. It is handled with care as it
may lead to loss of motivation in the employee, and eventually employee
may quit.
Employee Referrals
Another internal source of recruitment is the referrals provided by the

present employees of the company. Present employees are requested to
refer either their family or friends for the jobs which are advertised. This is
most beneficial in large companies or multinational corporations as the
large number of employees offer a huge pool of referrals. Also, this is a
very cost-effective method as the company does not have to go in for
advertisements in the external media. Most of the companies offer a
reward to the employee who refers family or friend for a job vacancy. The
reward is paid either on the appointment of the referral or after the
probation period of the referral is over.
74
Past Employees
Retired employees are another source of applicants as some of the retired

people may be willing to return to work on a part-time basis or as a
consultant. Also, they may recommend someone, either from their family
or friends, who would be interested in working for the organisation.
Sometimes, people who have left the company are willing to come back
and work. Sometimes, they also return to work for a better pay package
than offered earlier.
EXTERNAL SOURCES
External sources refer to sources outside an organisation. External

recruitment brings in new skills and talent into the organisation. Sources of
external recruitment are:
Professional Bodies
Professional bodies like Management/Chartered Accountant/ Company

Secretary/Cost Accountant institutions offer placement services to their
students. Also, trade associations publish journals for their members.
These journals carry advertisements of employers interested in recruiting
their members. Professional bodies or trade associations are very useful in
recruiting highly educated or skilled human resources.
Advertisements
This source of external recruitment is very popular due to its wide reach
and cost-effectiveness. Companies place advertisements in newspapers or
in professional/business journals. Mostly, companies place advertisements
in newspapers like Ascent (The Times of India), Economic Times, Indian
Express, etc. Advertisements must contain information like job content
(primary tasks and responsibilities), location of the job and growth
prospects, to whom one applies. The advertisement also draws attention to
the main features of the company and creates a desire in the candidate to
apply for the job advertised.
75
Employment Exchanges
Employment exchanges were set up due to the provisions in the

Employment Exchange (Compulsory Notification of Vacancies) Act, 1959.
The Act requires that all industrial companies having more than 25 or more
workers to notify about vacancies before they are filled. Employment
exchanges increase the pool of possible applicants. It is also useful in the
preliminary screening of a job seeker. Employment exchanges are useful in
recruiting blue-collar, white-collar and technical workers.
Campus Recruitment
Campus recruitment is mostly done from colleges and universities,

especially management (IIM and other institutes) and engineering
institutes (IIT). A placement officer in each institute handles the
recruitment functions and ensures that the student’s as well as the
company’s expectations are fulfilled. Campus recruitment is a major source
for recruiting fresh, highly educated personnel.
Walk-ins
Walk-ins are second to newspaper advertisements, and are the most

common and least expensive source of recruitment. Here, job seekers
directly walk into the office of any organisation or company and submit
their resumes to the Human Resource department. Sometimes,
advertisements are placed in newspapers by companies informing job
seekers about the future walk-ins. Walk-ins are mostly used for entry level
and unskilled vacancies.
Consultants
Consultants are retained by organisations for recruiting and selecting

managerial and executive personnel. They have nation-wide, sometimes
worldwide, contacts and reach. They keep the prospective employee and
employer anonymous. They also lend professionalism to the process of
recruitment and selection. They are expensive as they charge huge
amounts of fees. Hence, they are used while recruiting managerial level of
personnel.
76
Contractors
Contractors are used to recruit casual workers. The names of the workers
are not entered in the company records. Nowadays, consultants have
turned into contractors. Consultants hire people for skilled vacancies on a
contract basis. Sometimes, the contract employee, due to his good
performance, is hired as a full-time permanent employee by a company.
Radio and Television
Radio and Television are very rarely used today. Earlier, it used to enjoy the
same status as newspaper advertisements. It was used by government
departments only.
Acquisitions and Mergers
As a result of acquisitions and mergers, a large pool of employees is

created. Also, a large pool of new jobs is created. Organisation can use this
large and readily available pool of human resources to implement the new
organisation’s strategy. This saves a lot of time as the organisation need
not go in for the other standard recruiting methods.
Competitors
Recruiting from a rival or competitor is called poaching or raiding. This

method involves identifying the right people in rival companies, offering
them better terms of employment, and luring them. Sometimes, an
employee joining a rival company has to obtain ‘no objection certificate’
from his previous company. He may also have to pay a few months’ salary
to the previous company. Nowadays, companies ask their employees to
sign a confidentiality agreement. This is to ensure that the data or
information that an employee comes across in his duration of employment
in the company is not misused or used by the employee in a rival company
or any other company.
77
Job Portals
This is the new emerging method of recruitment since the advent of

Internet. Websites like naukri.com, monster.com, timesjobs.com,
jobstreet.com, etc. are some of the job portals. Job seekers upload/ post
their resumes on these portals. They then browse through the various
suitable vacancies posted on the job portal and apply for the same online.
Companies also browse through the various resumes of job seekers, posted
on the job portal, and directly contact the job seeker through e-mail or
telephone.
Previous Applicants
Applicants who have applied earlier and were rejected are another source
of recruitment. It is very cost-effective as the organisation keeps the
records of those applicants who had earlier applied for jobs in the
company. Also, there is no involvement of consultants nor does the
company have to take out advertisements in newspapers about the
vacancies. Previous applicants can be contacted very easily – either by mail
or telephone.
Activity B
Describe the various sources of recruitment.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
78
4.4 SELECTION
Selection is the process of choosing candidates with the necessary
qualifications and competence, out of the pool of job applicants, to fill jobs
in an organisation. Recruitment and selection are two sides of the same
coin. There is a slight difference between the two. While recruitment refers
to the process of attracting job seekers to apply for the vacancies, selection
refers to the process of choosing the right candidates from a pool of
applications received from the job seekers. Recruitment is positive in its
approach as it seeks to attract as many job seekers as possible. Selection
is negative in its approach as it eliminates the unqualified applicants in
order to choose the right candidate.
Selection process that follows recruitment is more of an elimination process

and is designed in various formats depending upon the recruitment
policies, needs, level, urgency, etc.
4.5 PROCESS OF SELECTION

If you observe the selection process in any organisation, it will look like the
following diagram:
79
Fig. 4.3: Selection Process
80
Preliminary Interview
The main purpose of a preliminary interview is to scrutinise and eliminate

unqualified job seekers, based on the information supplied in the
application forms or in their resumes. It is mostly conducted by the Human
Resource department and is sometimes seen as a public relations exercise.
Selection Tests
The next step in the selection process is the administration of selection

tests. Job seekers who pass the preliminary interview are asked to take a
test and the applicant’s ability, aptitude and personality are measured.
Ability tests help in determining how well an individual can perform tasks
related to the job. For example, secretaries may undergo a test which tests
their typing and data entry skills. Aptitude tests help determine a person’s
potential to learn in a given area, e.g., the numerical tests in the Banking
exam for probationary officers. Personality tests are used to measure an
employee’s motivation to function in a particular working environment.
Employment Interview
An employment interview is conducted by the manager of the department

which has posted the vacancy. This interview is very important as it allows
the interviewers and the applicants to learn about each other. Employment
interviews are flexible in nature, as it is left up to the interviewer to ask the
questions – there is no format that is to be followed and the interview
proceeds as per the questions asked by the interviewer and the answers
given by the interviewee.
Interviews can be one-to-one (only two participants – interviewer and the

interviewee), sequential (series of one-to-one interviews) or a panel
interview (more than one interviewer at a single interview). Interview
helps the company to obtain information about the applicant regarding his
suitability to the job. It also helps the applicant to obtain information about
the company, its policies, job description, etc. It is also a way of building a
company’s image among the applicants.
81
Reference and Background Check
Companies request the names, addresses and telephone numbers or

references for the purpose of verifying information provided by the
applicant in his resume or application form. Previous employers, known
public figures, university/college professors, neighbours, friends, etc. can
act as references. Usually, previous employers are preferred because they
are aware of the applicant’s performance. Reference checks are used to
check previous employment records, criminal records, educational records,
credit records, character reference, etc. Nowadays, due to increase in
frauds, background checks have become more strict and a major
requirement in all the companies.
Selection Decision
After obtaining all the relevant information in the previous steps, selection
decision must be made. The previous stages in the selection process are
used to narrow the number of candidates for a job vacancy. The final
decision has to be made from the pool of individuals who pass the tests,
interviews and reference checks. The final decision is decided by the
Human Resource Manager, in consultation with the line manager, as it is
the line manager who will be responsible for the performance of the new
employee.
Physical Examination
After the selection decision and before the job is offered, the candidate is
required to undergo a physical fitness test. The job offer depends upon the
candidate being declared fit after the physical examination. The physical
examination is either conducted by the company’s in-house physician or by
an external physician, selected by the company. The report is submitted to
the company for their records. The physical examination is done so as to
ensure that the candidate is fit to perform the work. Also, it protects the
employer from any invalid claims made by the employees as the employees
might have had the illnesses or injuries prior to the current job/ company.
82
Job Offer
After the candidate passes the physical examination, a job offer is made to
him by the company. The job offer is made through a letter of offer. The
letter of offer contains the date by which the candidate must report for
duty. The offer letter takes into consideration the notice period that the
candidate specifies during the earlier interviews. The offer letter may also
contain the compensation/salary details along with the various perquisites.
Employment Contract
On the day that the candidate reports to work at the new organisation, he
is given the letter of appointment which contains the job title, the number
of hours that he is to work, holiday details, sick leave details, length of
notice due to and from employee, etc. The new joinee has to sign the letter
of appointment and a copy of the signed appointment letter is given to the
joinee. The original signed copy of the appointment letter is kept with the
Human Resource department for record purposes.
Evaluation
The selection system is evaluated on a periodic basis. Feedback is asked

from the line managers by the Human Resource department whether the
selection process adopted by the company is correct. Depending on the
response received, the Human Resource department improves new
practices to improve its recruitment and selection process.
Certain parameters on which the selection process is evaluated are the

performance of the new employee, the employee turnover/ attrition/
separation during and after the probationary period, etc.
Activity C
Explain how the selection process is conducted in an organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
83
Ajay Verma: So Rajesh, have you gone for your induction programme?
Rajesh: No Sir. What is induction?
Ajay Verma: What? You haven’t gone for your induction! Induction is very
important. It is……
4.6 INDUCTION AND ORIENTATION

Induction and Orientation are designed to provide new employees with the
necessary information that they will need to function comfortably and
effectively in an organisation.
Induction is the process through which the newly inducted employee is

initiated into getting familiar and comfortable with the company culture. It
is like the “welcome kit” for the new employee, through which he/she is
made to go through various relevant departments/divisions to get familiar
with people and processes
Induction conveys the following information:

• General information about the work routine – number of hours to be
worked, office timings, duration for breaks for lunch or snacks, whether
home drop or transport fare is provided in case of late sitting at the
office, the number of holidays, etc.
• Information about the organisation – review of the organisation’s history,
vision and mission, objectives, products and services as well as how the
employee’s job contributes to the organisation’s objectives.
• Information about the organisation’s policies, work rules and employee
benefits.
84
Induction is conducted so that the anxiety of new employees can be

reduced. New employees are anxious about many things – whether they
will be able to fulfill the expectations of the supervisor/ organisation,
whether their expectations will be fulfilled by the organisation, whether
their colleagues will be helpful and will they get well along with their
colleagues. If these anxieties are not addressed, then the employee might
leave the organisation. Induction is also used to create a favourable
impression of the organisation and the work environment. Evaluation of an
induction programme is conducted by requesting the new employees to
complete questionnaire and to provide their feedback as comments.
Orientation is the process that follows Induction in which the newly

inducted employee is “orientated” to the job activities and requirements by
assigning him/her on the job duties to be accomplished. Although it
appears to be a trail-and-error learning period, orientation period is used to
make the new inductee to learn and adapt real-time issues by making him/
her accountable.
Rajesh: Sir, I will definitely go for my induction.
Ajay Verma: Talk to Lata and ask her to send your name for the induction
programme. Induction in our company is scheduled for the first working
day of every month.
Rajesh: Ok, Sir.
85
4.7 SUMMARY
Recruitment is the process of searching for and obtaining applications for
jobs, so that the right people can be selected from this pool of job seekers.
The process of recruitment involves planning, strategy development,
searching, screening, and evaluation and control. Sources of recruitment
could be either internal (within an organisation) or external (outside an
organisation). The most popular methods of recruitment are
advertisements in the newspapers, consultants, walk-ins and campus
recruitment. Selection refers to the process of picking the right candidates
from the pool of applications. The final selection is generally done by the
Human Resource departments in consultation with the line managers.
Selection process consists of eight steps, starting from preliminary
interview and ending with the evaluation of the selection process. Induction
is done to provide new employees with the necessary information that he
will need to function effectively in an organisation.

1. What is recruitment? Explain the process of recruitment.
2. Describe the various sources of recruitment.
3. What is selection? Explain the process of selection.
4. Write a short note on induction.
86
1. Hiring of employee is an ___________ process and it is not restricted to

the early stages of an organisation.
(a) forces
(b) business
(c) ongoing
(d) planet
2. Buying skilled and trained employees is advantageous as no

___________ cost has to be incurred.
(a) goods
(b) products
(c) funds
(d) training
3. Once the recruitment plan and strategy are developed, the

___________ process begins.
(a) search
(b) frame
(c) curry
(d) vendor
4. Screening refers to the scrutinisation and short-listing of ___________

received.
(a) sun
(b) applications
(c) funds
(d) links
5. Sources of ___________ can be classified into internal source and

external sources.
(a) good
(b) bad
(c) recruitment
(d) focus
87
6. Transfers are another way to ___________ from present employees.

(a) recruit
(b) zero
(c) dad
(d) good
7. Recruiting from a rival or competitor is called ___________ or raiding.

(a) hopping
(b) poaching
(c) carter
(d) barter
8. Websites like naukri.com, timesjobs.com, jobstreet.com, etc. are some

of the job ___________.
(a) cash
(b) money
(c) portals
(d) satisfaction
9. Employees ___________ the firm for better opportunities, some

employees retire and some employees die.
(a) factor
(b) output
(c) carter
(d) leave
10.Applicants who have applied earlier and were rejected are another
source of ___________.
(a) recruitment
(b) internal
(c) market
(d) classic
Answers:
1. (c), 2. (d), 3. (a), 4. (b), 5. (c), 6. (a), 7. (b), 8. (c), 9. (d),

10. (a).
88
Related Reading
The ‘No Show’ Act!
(Courtesy – Yasmin Taj, The Times of India – Ascent)
India Inc. is plagued not only by the problem of rising attrition, but
also by ‘no show’ employees. It is seen that a large number of job
seekers who are given offer letters do not show up on the date of
joining. Experts say it could have dire consequences on a working
professional’s career graph.
Quite often, employers are faced with the problem of a candidate who has
been given the offer letter and is expected to join soon, but does not show
up on the joining date – a candidate who simply disappears without any
form of notification to the employer. Any employer who has had this
problem is sure to have been faced with problems as all plans have been
made to get them on board and hand over certain assignments to them.
Also, for a working professional, doing the ‘no show’ act is not just an
unethical practice but can have some dire consequences for his
professional career in the long run. So, have you met a ‘no show’ candidate
recently?
Naveen Coomar, Vice-President – Human Resources, Impetus Technologies

Inc. expresses, “This is an unethical practice, but there is not much an
organisation can do at this stage. This is a reflection of social reality to
some extent and also of organisational practice of engaging prospective
employees. Smart hiring should be able to engage the candidates strongly
to avoid this. We are working out a practice of identifying such candidates
and mark their profiles for disuse in future. We are also working out
strategies to engage a candidate better during the hiring process to avoid
this.”
According to Dr. Sandeep K. Krishnan, Vice-President – HR and Corporate

Development, Acropetal Technologies Ltd., Bengaluru, “No show becomes
an issue because in an open market there are no much ways to curb this.
However, at entry levels like from MBA schools or engineering colleges,
institutes themselves impose restriction on candidates to make sure they
accept and join an offer taken up by stopping them to appear for more
companies. At senior levels, it generally takes couple of months for a
person after accepting the job to join. In case the person fails to join, it
89
generally pulls back the business by at least another couple of months. In

India, it is not considered unethical to accept an offer and not join,” he
asserts.
Is there any mechanism by which the employer can figure out that a
certain candidate is not going to show up on the scheduled joining date? “It
can be judged through gauging the interest level of candidates and also
during extensive HR rounds. Constant touch and regular/weekly basis
interactions with the candidate can help in identifying and anticipating
whether the candidate would show up on joining day,” avers Coomar.
“The best way to curb this problem is to clearly understand the candidate’s
expectations and take enough time to understand the fit of the candidate
vis-à-vis job and organisation. Many a times, it is only wrong selection that
finally ends up as ‘no show’. Constant engagement with the candidate who
is joining is another best way to make sure that the person will join.
Building your employer brand and making a strong compulsive reason for a
person to join after accepting the offer are two positive factors that can
reduce ‘No Shows’. Offering joining bonuses and buying off notice periods
are some other mechanisms to ensure waiting time is reduced for an
individual joining and hence increasing the chances of joining,” suggests
Krishnan.
For candidates, it is imperative that they understand the consequences of

doing such an act. If they ever want to come back to an organisation they
had earlier done the ‘no show’ act with, it is going to prove quite
hazardous. Your reputation can also be maligned amongst companies,
which fall under the same sector or those which are connected to others in
one way or the other. So, will such a candidate be considered by the
organisation or will it be a case of ‘once bitten, twice shy’? “Normally, I
shall not like to encourage this. However, in a genuine case, we may
reconsider the candidate and re-hire him/her, given a chance to explain
his/her absence on the date of joining,” says Coomar. According to
Krishnan, “Generally if there is a genuine case or a person has asked for
prior postponement, we may consider joining late. It is very rare that a
person who has not showed up or communicated to you will try to come on
board after a long period. In such cases, it will be considered as a fresh
application if the case is worth considering and will depend on suitability of
the candidate and the position that is getting filled."
90
So, think twice before you ever try out the ‘no show’ act with an employer!
Though they might not take any direct action against you, the
consequences of this act will surely stay with you as a blotch for long!
91
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
92
MOTIVATION
Chapter 5
Motivation
Objectives

• What is Motivation
• Some of the early theories of motivation
• Some of the contemporary theories of motivation
• Application of motivation in an organisation
Structure:
5.1 Nature and Importance of Motivation
5.2 Early Theories of Motivation
5.3 Contemporary (Modern) Theories of Motivation
5.4 Applied Motivation Practices
5.5 Summary
Our story continues…….
Ajay Verma: Hey Rajesh, why do you look so sad?
Rajesh: Sir, what to tell you? I enjoy my work but then sometimes I
wonder if I will ever achieve my goal of completing my MBA studies.
Ajay Verma: Oh, don’t worry. As soon as you achieve your basic goal of
physiological and safety needs, you will be on the path to achieve your
goals which will increase your self-esteem.
Rajesh: Sir, what are you talking? I did not understand one word of it.
Ajay Verma: Sorry, I apologise. I was talking about a theory of motivation
(laughs first). I will explain to you what is motivation.
93
MOTIVATION
5.1 NATURE AND IMPORTANCE OF MOTIVATION

Motivation is what drives a person to perform to the best of his ability.
Ability refers to the skill and competence of the person to complete a given
task.
Motivation is a process which begins with a physiological need (need for air
or food or water) or a psychological need (need for recognition), which
triggers behaviour that is aimed at a goal. It is the characteristic that helps
an individual achieve his goal.
Motivation is the state one experiences when needs are fulfilled.
1. Motivation arises when individual needs are recognised and fulfilled by

the organisational initiatives and activities.
2. Each employee gets motivated only when his/her needs are fulfilled
leading to satisfaction.
3. Every employee, thus, is driven by needs different from the others.
4. HR, and in turn the organisation, has to recognise their individual needs
and create processes to fulfill them.
5. “Different strokes for different folks” as the saying goes people are all
different and have different needs and desires.
6. While companies adopt motivational policies encompassing all

employees, it is the role of HR to individualise the motivation based on
individual needs.
Performance is considered to be a function of ability and motivation. Thus:
Job performance = f(ability)(motivation)
Motivation is very important for an organisation because of the following

benefits it provides:-
94
MOTIVATION
Puts Human Resources into Action
Every concern requires physical, financial and human resources to

accomplish the goals. It is through motivation that the human resources
can be utilised by making full use of it. This can be done by building
willingness in employees to work. This will help the enterprise in securing
best possible utilisation of resources.
Improves Level of Efficiency of Employees
The level of a subordinate or an employee does not depend upon only his
qualifications and abilities. For getting the best of his work performance,
the gap between ability and willingness has to be filled which helps in
improving the level of performance. This will result into:
1. Reducing cost of operations, and
2. Improving overall efficiency.
3. Increase in productivity.
Leads to Achievement of Organisational Goals
The goals of an enterprise can be achieved only when the following factors
take place:
1. There is best possible utilisation of resources.
2. There is a co-operative work environment.
3. The employees are goal-directed and they act in a purposive

manner.
4. Goals can be achieved if co-ordination and co-operation takes

place simultaneously which can be effectively done through
motivation.
95
MOTIVATION
Builds Friendly Relationship
Motivation is an important factor which brings employee satisfaction. This

can be done by keeping into mind and framing an incentive plan for the
benefit of the employees. This could initiate the following things:
(a) Monetary and non-monetary incentives,
(b) Promotion opportunities for employees,
(c) Disincentives for inefficient employees.
In order to build a cordial, friendly atmosphere in a concern, the above

steps should be taken by a manager. This would help in:
1. Effective co-operation which brings stability.
2. Industrial dispute and unrest in employees will reduce.
3. The employees will be adaptable to the changes and there will be

no resistance to the change.
4. This will help in providing a smooth and sound concern in which

individual interests will coincide with the organisational interests.
5. This will result in profit maximisation through increased

productivity.
Leads to Stability of Workforce
Stability of workforce is very important from the point of view of reputation

and goodwill of an organisation. The employees can remain loyal to the
organisation only when they have a feeling of participation in the
management. The skills and efficiency of employees will always be of
advantage to employees as well as employers. This will lead to a good
public image in the market which will attract competent and qualified
people into an organisation.
96
MOTIVATION
From the above discussion, it is clear to say that motivation is an internal

state which can be understood only by manager since he is in close contact
with the employees. Needs, wants and desires are interrelated and they
are the driving force to act. These needs can be understood by the
manager and he can frame motivation plans accordingly. Motivation,
therefore, is a continuous process since motivation process is based on
needs which are unlimited. The process has to be continued throughout.
Thus, motivation is important both to an individual and a business.

Motivation is important to an individual as:
1. Motivation will help him achieve his personal goals.
2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of an individual.
4. An individual would always gain by working with a dynamic team.
Similarly, motivation is important to an organisation as:
1. The more motivated the employees are, the more empowered the team
is.
2. The more is the teamwork and individual employee contribution, more

profitable and successful is the business.
3. During period of amendments, there will be more adaptability and

creativity.
4. Motivation will lead to an optimistic and challenging attitude at

workplace.
Activity A
What is motivation? Explain its importance.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
……………………………………………………….……………………………………………………….……….
97
MOTIVATION
Ajay Verma: I hope, Rajesh, you have now understood what is motivation
and its importance.
Rajesh: Yes, Sir. But you were talking something about my safety
needs….I still do not understand what that means.
Ajay Verma: Well, I was talking about Maslow’s need hierarchy theory. Let
me explain to you that and other theories of motivation.
Rajesh: Ok, Sir.
There are many theories which explain motivation. They are classified into:
1. Early theories of Motivation.
2. Contemporary theories of Motivation.
5.2 EARLY THEORIES OF MOTIVATION

These theories fall under the Content Theories of Motivation. They address
the “What” of Motivation – the external state of the environment that
motivates.
Maslow’s Need Hierarchy Theory
The need hierarchy theory of motivation was put forth by Abraham Maslow.
The theory states that:
98
MOTIVATION
Fig. 5.1: Maslow’s Need Hierarchy Theory
1. Human beings have wants and desires. These wants and desires
influence their behaviour. Only unsatisfied needs can influence
behaviour.
2. Human beings have many needs and they can be arranged in the order
of their importance.
3. Only when one level of need is satisfied, then the person moves on to
the next level.
99
MOTIVATION
He classified the human needs on the basis of their importance into the
following five levels:
• Physiological needs: This is the most basic need of all human beings.
It is the need for physical survival and includes the needs for food, drink,
air, sleep, sex, shelter and other bodily needs. In an organisation,
physiological needs could be the basic working conditions like an office
structure, canteen facilities, drinking water facilities, etc.
• Safety needs: This includes security and protection from physical and
emotional harm. Security needs in an organisation could be job security,
rise in salary, safe working conditions, etc.
• Belonging and love needs: It is the need for affectionate relationships
with others. In an organisation, these could be in the form of compatible
work group, professional (sometimes even personal) friendship and peer
acceptance.
• Self-esteem needs: These needs include self-respect and esteem from
others. Self-esteem needs include confidence, achievement,
independence and freedom. Esteem from others include prestige,
recognition and appreciation. Self-esteem needs, from an organisational
viewpoint, include job title, merit pay, challenging work and co-worker/
supervisor appreciation and recognition.
• Self-actualisation needs: It includes the desire to become everything
that a person is capable of becoming. It is to reach the peak of one’s
potential. From an organisational viewpoint, self-actualisation could be in
the form of excelling in one’s job or successfully managing a team.
100
MOTIVATION
Merits of the Theory
a. The theory is helpful to managers who are keen about motivating their
employees. They can use this theory to identify the individual needs of
the employees and offer satisfaction for the particular needs.
b. The theory is also helpful as it explains many variations in human

behaviour. It provides insights as to why an employee is motivated by
c. The theory also puts forth the idea that motivation is never constant – it
is always changing.
Criticisms of the Theory
The theory has also been criticised for the following points:
a. At any given point of time, the hierarchy of needs exists at all levels. A
person who is motivated by self-esteem needs will not forget to satisfy
his physiological needs.
b. Hierarchy of needs need not be the same for everyone. Some people
may place social and security needs higher than self-actualisation.
Others may place self-esteem needs higher than physiological needs.
c. Managers may not have the time to diagnose all the needs of every
employee. Also, managers may not be able to provide a perfect solution
to the needs of every employee.
In spite of these constraints, the theory is important as it has made the

management aware of the diverse needs of the employees.
101
MOTIVATION
Theory X and Theory Y
Douglas McGregor proposed two distinct views of human beings: one

basically negative – labelled Theory X and the other basically positive –
labelled Theory Y. After viewing the way managers dealt with employees,
McGregor concluded that a manager’s view of the human beings is based
on certain assumptions and that he or she tends to mould his or her
behaviour towards the subordinates according to these assumptions.
Under Theory X, four assumptions are held by the manager:
1. Employees inherently dislike work and, whenever possible, will attempt

to avoid it.
2. Since employees dislike work, they must be coerced, controlled, or

threatened with punishment to achieve desired goals.
3. Employees will shirk responsibilities and seek formal direction whenever

possible.
4. Most workers place security above all other factors associated with
work, and will display little ambition.
Theory Y has the following assumptions:
1. Employees can view work as being as natural as rest or play.
2. A person will exercise self-direction and self-control if he is committed

to the objectives.
3. The average person can learn to accept, even seek responsibility.
4. Creativity or the ability to make good decisions is widely dispersed

throughout the population, and not necessarily the sole province of only
those who are in management functions.
Theory X assumes that lower-order needs dominate individuals whereas

Theory Y assumes that higher-order needs dominate individuals. McGregor
believed that Theory Y assumptions were more valid than Theory X
assumptions. Therefore, he proposed ideas like participation in decision-
making, responsible and challenging jobs, and good group relations as
approaches that would maximise an employee’s job motivation.
102
MOTIVATION
But there is no evidence to confirm that either set of assumptions is valid.

Nor is there any evidence that acceptance of Theory Y assumptions and
changing one’s actions accordingly will lead to more motivated workers.
Frederick Herzberg’s Two-factor Theory
The two-factor theory has been proposed by Frederick Herzberg and is also
known as the motivation-hygiene theory. Herzberg, along with his
associates, carried out a survey using the critical incident method for
obtaining data for the purpose of analysis. The employees were basically
asked two questions:
(a) When did they feel particularly good about their job?
(b) When did they feel exceptionally bad about their job?
Based on the responses obtained, it was observed that certain

characteristics related to job satisfaction and others to job dissatisfaction.
These characteristics could be classified into intrinsic/motivation factors
and extrinsic/hygiene factors.
Fig. 5.2: Hygiene and Motivation Factors
Intrinsic factors like achievement, recognition, the work itself,

responsibility, advancement, and growth seem to be related to job
satisfaction. These factors are also known as motivators, satisfiers or job-
content factors. When questioned as to when they felt good about their
work, the respondents attributed these characteristics to themselves. On
the other hand, when they were dissatisfied, they tended to attribute it to
extrinsic factors like company policy and administration, supervision,
103
MOTIVATION
working conditions, salary, status, security and interpersonal relations.

These factors are also known as dissatisfiers, hygiene factors, maintenance
factors, or job-context factors.
According to Herzberg, satisfaction is affected by motivators and

dissatisfaction by hygiene factors. Also, satisfaction and dissatisfaction
were two separate characteristics of a job and the opposite of ‘satisfaction’
was not ‘dissatisfaction’ but it was ‘no satisfaction’. Also, the opposite of
‘dissatisfaction’ was ‘no dissatisfaction’.
Hygiene factors, when made available to employees, will not result in

motivation. At the most, the employees will not be dissatisfied. But, at the
same time, the employees will not be satisfied. The employees will be
satisfied and motivated only when they are provided the motivation
factors. The motivating factors like promotion and recognition are found to
be intrinsically rewarding.
Evaluation of the Theory
Upon evaluation, the following points have emerged:

• The procedure that Herzberg used is limited by its methodology. When
things are going well, employees tend to credit themselves, and on the
other hand, they blame failure on the extrinsic environment.
• The reliability of Herzberg’s methodology is questioned. Since raters have
to make interpretations, it is possible they may contaminate the findings
by interpreting one response in one manner while treating a similar
response differently.
• No overall measure of satisfaction was utilised. A person my dislike part
of his or her jobs; yet think the job as acceptable.
• The theory is inconsistent with previous research. The motivation-
hygiene theory ignores situational variables.
• Herzberg assumes a relationship between satisfaction and productivity,
but the research methodology he used looked only at satisfaction and not
at productivity. To make such research relevant, one must assume a
strong relationship between satisfaction and productivity.
104
MOTIVATION
Activity B
Describe the early theories of motivation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
5.3 CONTEMPORARY (MODERN) THEORIES OF

MOTIVATION
These theories fall under the Process Theories of Motivation. They address
the “How and Why” of Motivation – The internal state of the individual that
motivates.
David C. McClelland’s Achievement Motivation Theory
Achievement Motivation Theory or the Three Needs Theory has been put
forward by David C. McClelland. In this theory, he states that a person’s
behaviour is mostly motivated by any of the three needs – Power, Affiliation
and Achievement. It does not mean that a person does not have other
needs, but it means that a person is primarily motivated by any of these
three needs.
Need for Achievement (nAch)
Employees with a high need for achievement get satisfaction when they
achieve the goals that they have set. Succeeding at a task is very
important to the high achiever. They are mostly rewarded in terms of
money, though money is not the motivating factor for employees with high
need for achievement. Employees with high need for achievement require
feedback about their achievements.
Need for Power (nPow)
Employees displaying the needs for power derive satisfaction from the
ability to control others. Actual achievement of goals is less important than
the means by which the goals are achieved. Satisfaction is derived from
being in positions of influence and control, and individuals who have a high
need for power derive satisfaction from being in positions of influence and
control.
105
MOTIVATION
Need for Affiliation (nAff)
Individuals with the need for affiliation derive satisfaction from social and
interpersonal activities. There is a need to form strong interpersonal ties
and to ‘get close’ to people. Such individuals will prefer to work with their
friends rather than technically competent people.
a. The theory highlights the importance of matching the individual and the
job. Employees with low achievement needs prefer situations of
stability, security and predictability. They respond better to considerate
supervision than to impersonal high-pressure supervision and look to
the workplace and co-workers for social satisfaction.
b. Employees with high achievement needs thrive on work that is

challenging, satisfying, stimulating and complex. They welcome
autonomy, variety and frequent feedback from supervisors.
c. The research also suggests that managers can, to some extent, raise
the achievement needs level of subordinates by creating the proper
work environment by permitting their subordinates independence,
increasing responsibility and autonomy, gradually making tasks more
challenging, and praising and rewarding high performance
The theory has also been criticised for the following points:
a. The theory has been criticised on the question whether motives can be
taught to adults.
Psychologists suggest that the acquisition of motives normally occurs in

childhood and is very difficult to change, once it has been established.
b. The theory has been criticised for the methodology used by McClelland.
c. The theory has been criticised for the point that the needs are
permanently acquired.
106
MOTIVATION
McClelland argued that the needs can be changed socially through

education or training. But the critics affirm that this change is only
temporary and that the needs cannot be changed and that they are
permanently acquired.
Adam’s Equity Theory of Motivation
The equity theory is also known as the ‘social comparison’ theory or the
‘inequity’ theory. The equity theory is based on the assumption that
individuals are motivated by their desire to be equitably treated in their
work relationships. When employees work for an organisation they
basically exchange their services for pay and other benefits.
Employees do not work in a vacuum. They constantly make comparisons.

The theory proposes that an employee compares his job inputs and
outcomes with another employee having similar work and education
background. If his input-outcome ratio is equal with the other employee’s
input-outcome ratio, then the employee feels they are equal. If the ratios
are unequal, then the employee will view himself as underpaid or overpaid.
He will then be motivated to correct this inequity.
When attempting to reduce inequity, the employee will try any of the
following alternatives:
a. The employee will alter his inputs.
b. The employee will alter his outcomes.
c. The employee might distort his inputs and outcomes.
d. The employee may leave the organisation.
e. The employee may seek another employee to compare himself to.
f. The employee might distort the inputs and outcomes of the other
compared employee, thus forcing the other employee to leave the
organisation.
107
MOTIVATION
a. The theory recognises the influence of social comparison processes on

motivation.
Individuals are concerned not only with the absolute amount of reward
they receive for their efforts, but also with the relationship of this
amount to what others receive. Any inequity motivates them to restore
equity.
b. The theory adopts a realistic approach to motivation. The theory states

that a major share of motivated behaviour is based on the perceived
situation rather than on the actual set of circumstances.
a. The theory is not clear as to how a person chooses or changes the other
person with whom he compares himself to.
b. The relationship between inputs and outcomes has not been looked into.
c. The feeling of inequity may force one employee to quit the job while
another employee may change the person to whom they are comparing
themselves. Hence, the theory has been criticised for the method of
resolution used to resolve inequity.
Victor Vroom’s Theory of Expectancy
The most comprehensive explanation of motivation is expectancy theory.

The theory argues that the strength of tendency to act in a certain way
depends on the strength of an expectation that the act will be followed by
a given outcome and on the attractiveness of that outcome to the
individual. Therefore, it includes the following three variables:
1. Attractiveness: The importance the individual places on the outcome

or reward that can be achieved on the job. This considers the
unsatisfied needs of the individuals.
2. Performance-reward linkage: The degree to which the individual

believes performing at a particular level will lead to the attainment of a
desired outcome.
108
MOTIVATION
3. Effort-performance linkage: The probability perceived by the

individual that exerting a given amount of effort would lead to
performance.
If any one of these variables is low, motivation is likely to be low. No

matter how tightly desired outcomes are linked to performance, if an
employee thinks that it is impossible for him to perform, then motivation to
perform will be low. Similarly, if the employee does not think that the
outcome is linked to performance, or if the employee does not desire the
outcome, then motivation will be low.
Managers of successful firms strive to ensure that all the three variables
are high so that the employee is highly motivated.
a. The theory views individuals as thinking-reasoning beings who have

beliefs and anticipations concerning future events in their lives. This
model values human dignity.
b. The theory implies that managers must make it possible for an

employee to see that effort can result in appropriate need satisfying
rewards.
a. The theory does not state in which situations it can be applied.
b. The theory is complex and it has not been fully tested.
c. The theory has limited use because it tends to be valid only in situations
where the effort-performance and the performance-reward linkages are
clearly perceived by the employees.
Activity C
Describe the contemporary theories of motivation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
109
MOTIVATION
Rajesh: Wow, I did not know that there were theories for motivation.
Thank you Sir for explaining them to me.
Ajay Verma: Yes, the theories explain a lot about motivation. But it is not
enough to know the theories. You should also know how and when to apply
them.
5.4 APPLIED MOTIVATION PRACTICES

A manager in an organisation, in addition to having knowledge about the
various theories of motivation, should also know how to apply these
theories to motivate his subordinates. Some of the ways of motivating
employees are through rewards, job design, empowerment, participative
management, profit sharing, merit pay, etc.
Financial Rewards
Organisational rewards can be mostly classified into – Membership- and

Seniority-based rewards, Job status-based rewards, Competency-based
rewards, and Performance-based rewards.
Membership- and Seniority-based Rewards
Membership-based rewards are rewards received if a person is member of

an accredited association or institution. A Chartered Accountant or a
Company Secretary or a Cost Accountant is paid more than a Graduate.
Seniority-based rewards are those rewards which are paid on the basis of a
person’s seniority in the firm. Advancement pay raises, retirement benefits
and perquisites depend on the seniority of an employee in the firm.
There are advantages and limitations associated with membership- and

seniority-based rewards. Membership rewards are used to attract job
applicants of a certain qualification but these rewards may not directly
motivate job performance. Seniority-based rewards reduces the employee
turnover since the cost of quitting increases with the employee’s length of
service. But seniority-based rewards may fail to motivate junior achievers
to perform better. Another disadvantage with both membership- and
seniority-based rewards is that they may discourage poor performers from
leaving the organisation voluntarily as alternative jobs may not be
110
MOTIVATION
available to these poor performers. Most of the times, it is the junior

achievers who leave for better-paying jobs.
Job Status-based Rewards
Every organisation rewards employees for the status of the jobs they are
holding. Job evaluation systems are used by firms to evaluate the worth of
each job in terms of the necessary skills, effort and responsibility, and
working conditions. If a firm does not use job evaluation system, then it
relies on the pay surveys conducted by research organisations on its
competitors.
Jobs that require more skill and effort, have more responsibility, have
difficult working conditions, and have more value. Therefore, the pay would
be high for such jobs. A supervisor will receive higher rewards than a junior
mechanic in the firm because the supervisor’s job has more value to the
organisation (calculated by the job evaluation system or the pay survey).
High status job-holders rewarded with more perquisites, larger offices,

company-paid vehicles, etc.
Job status-based rewards maintain feelings of equity. Job evaluation

systems ensure internal equity, i.e., the employees feel their pay is fair
when compared to how much other jobs in the organisation are paid. Pay
surveys help in maintaining external equity, i.e., the employees feel their
pay is fair when compared to how much other people in other organisations
are paid. Job status-based rewards motivate employees to compete for
positions higher up in the organisational hierarchy.
But sometimes, these rewards fail to motivate achievers to perform better

as they feel that non-performers still get rewarded better as they are
holding a higher status job. Also, employees might exaggerate their job
description to get a higher job status which will then help them in getting
higher rewards.
111
MOTIVATION
Competency-based Rewards
Competency-based rewards are rewards given to the employees on the

basis of their competencies. Competencies are reflected in the skills,
knowledge and behaviours displayed by employees. Rewards on the basis
of competencies leads to skill-based pay, where the employees are paid on
the number of skills they display while handling different jobs or on the
depth of the knowledge while handling one job.
Competency-based rewards motivate employees to acquire additional skills

so that they become more useful to the organisation. It also results in
process, product and work improvements as the various skills help an
employee in identifying ways to better the job. On the other hand, the pay
disparities could demotivate other employees.
Performance-based Rewards
Nowadays, the emerging trend is to link pay to performance rather than to

seniority or membership. Most of the performance-based rewards can be
classified as following:
1. Individual rewards: Piece rate, commission, merit pay and bonuses.
2. Team rewards: Gain sharing, special bonuses and paid vacations.
3. Organisational rewards: Profit sharing and stock options.
Individual rewards are very common in organisations. Piece rate is the

reward given to the number of units produced or the number of
transactions processed by an employee. Piece rate is common in the
production sector. It is also an emerging reward in the current BPO sector.
Commissions are a fixed percentage or fixed amount paid on the actual
sales achieved by salespeople. This is used mostly in the real estate and
manufacturing sectors. Merit pay is based on an individual’s performance.
Bonuses are paid on the achievement of certain objectives by an individual.
112
MOTIVATION
Team rewards are paid so that these rewards support the team-based
structures. This is also done to encourage team spirit in the organisation.
Some teams are rewarded with special bonuses, paid vacations or gifts if
the team has collectively achieved specific goals. Top salespeople of an
organisation might be sent on all-expense-paid vacation trips to exotic
places, when they achieve certain sales objectives of the firm. Gain sharing
is a type of reward that motivates team members to reduce costs and
increase labour efficiency in their process. Mostly, the company shares the
benefits of the cost savings with the employees who helped achieve the
cost saving.
Profit sharing is an organisational performance-based reward. Corporate

profits are awarded to designated employees. Employees stock option
schemes (ESOPs) are given to employees so that they also can be owners
of the firm. ESOPs are used as a retention strategy so that an employee
can complete certain years of service in the organisation. This is done to
ensure that high achievers do not leave the organisation for better paying
jobs at the competitors’ organisation.
Activity D
List the various financial rewards in your own organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Non-financial Rewards
These are mostly in the form of awards, letters of appreciation, club

membership, gift vouchers, etc. These are mostly given in recognition of
achievements of the employees, e.g., punctuality on all working days of the
year, completion of certain years of service in the organisation, achieving
savings through cost reduction in processes, etc.
113
MOTIVATION
Behavioural Methods of Motivation
In addition to the above methods of motivation – financial and non-

financial rewards – there are other methods of motivating the employees
which aim at changing the behaviour of the employees. Some of these are
explained below:
Job Design
Job design has a critical impact on the motivation of the employees. It is

the process of determining the content of the job and how the job should
be performed. It was Herzberg who conceived job design as an important
instrument to motivate employees. Jobs are designed by focusing on the
individual and the interaction between him and specific attributes of the
job. Such an approach helps make the job interesting and keeps the
employee motivated.
Some of the approaches of job design are job rotation, job enlargement
and job enrichment. Job enrichment has more impact and is more complex
than job enlargement and job rotation.
Fig. 5.3: Approaches of Job Design
114
MOTIVATION
1. Job Rotation
Job rotation refers to moving employees from one job to another job so as
to add variety and reduce boredom by allowing them to perform a variety
of tasks. When an activity is no longer challenging, the employee would be
moved to another job at the same level that has similar skill requirements.
By diversifying the employee’s activities or jobs, the disinterest or boredom
of the employee is reduced.
For example, an electrician, in the first week, will be assigned the task of
drilling holes in the walls. In the second week, he will be assigned the task
of laying down the electrical cables. In the third week, he will be assigned
the task of testing the electrical system laid down.
Employees with a wider range of skills are more flexible to adapt to

change. Such employees can also be selected to fill vacancies. On the other
hand, training costs increase. There is disruption of work as the rotated
employees take time to adjust to the new job. It can demotivate ambitious
employees who seek specific responsibilities in their chosen specialty.
2. Job Enlargement
Job enlargement refers to the expansion of the number of different tasks

performed by an employee in a single job. Job enlargement attempts to
add similar tasks to the existing job so that it has more variety and be
more appreciated.
For example, earlier in banks, one person would prepare letter of credit for
issuance, a second person would amend it, a third person negotiated the
payment and a fourth person would pass the debit or credit entry in the
customer’s account. This was how a typical letter of credit transaction used
to take place. Nowadays, all these four activities are performed by a single
person as a single transaction.
Enlarged jobs with optimal levels of complexity create tasks that are
challenging but attainable. Enlarged jobs allow for more meaningful
feedback and can be particularly motivating if they are linked to
organisational rewards. However, employees may require additional
training for the new and enlarged tasks. Also, productivity may fall down as
the employee adjusts to the enlarged scope of his work.
115
MOTIVATION
3. Job Enrichment
A job is enriched when the nature of the job is exciting, challenging and
creative, or it gives the employee more decision-making, planning and
controlling powers.
For example, the job of an electrician is enriched when he is assigned the

tasks of ordering the raw material of electrical cables and of designing the
electrical system. These jobs, in addition, to the tasks of drilling holes in
the walls, laying down the electrical cables and testing the electrical
system laid down, gives the electrician decision-making, controlling and
planning powers.
Job enrichment improves both task efficiency and human satisfaction by

building greater scope for employee’s personal achievement and
recognition. It makes a job more challenging and responsible, thus giving
more opportunity for individual advancement and growth.
Job enrichment benefits employees and organisations in terms of personal

motivation, performance, satisfaction, job involvement and reduced
absenteeism. On the other hand, the employees may not want more
responsibility. They may, in fact, be content with the lack of responsibility
present in the job. Job enrichment is not a substitute for good supervisory
practices, company policies and compensation package.
Empowerment
In the earlier days, employers would motivate employees by providing

them with financial rewards. But nowadays, young job aspirants are
looking for more than just monetary rewards. More than monetary
rewards, it is the feeling that the employee ‘owns’ the job that motivates
him/her to perform the job.
Empowerment can be understood as the process of enhancing feelings of

self-efficiency and a sense of ‘owning’ a job. Empowered employees are
energetic and passionate. Because they are empowered, they aspire to do
a better job and are the ones who will suggest improvements or cost
initiatives. It may not lead to monetary rewards always but they feel a
sense of satisfaction on a personal level.
116
MOTIVATION
Empowerment is facilitated by a combination of factors including values,

leadership, job structure and reward systems. It occurs when power of
decision-making and authority to share resources goes to employees who
then experience a sense of ownership and control over jobs. Empowered
employees know that their jobs belong to them. Given a say on how things
are done, employees feel more responsible. When they feel responsible,
they show more initiative in their work, get more work done and enjoy the
work more.
Information sharing and team formation are crucial building blocks of

empowerment. Empowered employees know what they are working
towards and understand how their work affects other employees and the
organisation as a whole.
117
MOTIVATION
5.5 SUMMARY
Motivation is the characteristic that helps an individual achieve his goal.
Performance is considered to be a function of ability and motivation.
Motivation is important as it puts human resources into action, improves
level of efficiency of employees and leads to achievement of organisational
goals. Maslow’s need hierarchy, McGregor’s Theory X and Y, and Herzberg’s
two-factor theory are some of the early theories of motivation. Need
achievement theory, expectancy theory and equity theory are some of the
contemporary theories of motivation. Financial rewards are awarded on the
basis of merit, seniority, job status, competency and performance. Non-
financial rewards are mostly in the form of awards, letters of appreciation,
club membership, gift vouchers, etc. Behavioural methods of motivation
involve job rotation, job enlargement, job enrichment and empowerment –
to name a few.

1. Explain motivation as a concept and describe its importance.
2. Evaluate the early and contemporary theories of motivation.
3. Describe the various financial rewards.
4. Explain the non-financial aspects of motivation in an organisation.
118
MOTIVATION
1. Ability refers to the skill and competence of the person to complete a

given ____________.
(a) manpower
(b) task
(c) cash
(d) currency
2. Motivation is the characteristic that helps an individual achieve his

_____________.
(a) cash
(b) people
(c) goal
(d) driver
3. Every concern requires physical, financial and human resources to

accomplish the ____________.
(a) cashless
(b) market
(c) internal
(d) goals
4. Motivation is an important factor which brings ____________

satisfaction.
(a) employee
(b) money
(c) honey
(d) morning
5. Stability of ____________ is very important from the point of view of

reputation and goodwill of an organisation.
(a) nature
(b) workforce
(c) price
(d) pocket
119
MOTIVATION
6. Needs, wants and desires are ____________, and they are driving force
to act.
(a) imbalance
(b) honey
(c) interrelated
(d) money
7. If an individual is ____________, he will have job satisfaction.

(a) smart
(b) cashless
(c) stagnant
(d) motivated
8. Motivation is ____________ both to an individual and a business.

(a) important
(b) cultural
(c) technological
(d) climatic
9. Motivation will help in ____________ of an individual.

(a) poor
(b) self-development
(c) depleted
(d) energy
10.Motivation is what drives a person to the best of his ____________.

(a) cultural
(b) political
(c) ability
(d) climatic
Answers:
1. (b), 2. (c), 3. (d), 4. (a), 5. (b), 6. (c), 7. (d), 8. (a), 9. (b), 10. (c).
120
MOTIVATION
Related Reading
Maintaining and Motivating the Best Workforce
(Courtesy – Sheetal Srivastava, The Times of India – Ascent)
Maintaining a motivated, quality workforce can be quite

challenging in the future as many organisations look for creative
ways to get Baby Boomers, Gen-Xers and Gen Y employees to work
together as an effective, co-operative and respectful team.
With markets and industries growing at a fast pace, matching this growth
with productivity has never been more pronounced. In the backdrop of
increasing level of globalisation and improved access of resources to all, it
would not be wrong to conclude that it is the quality of people and
workforce that define an organisation. Today, motivating employees to
achieve and realise their best has become imperative for any organisation’s
growth. “Needless to say, our growth is contingent on developing, growing
and honing talent of our workforce and encouraging them to perform
better. The easiest way to do so is through motivation. As the workplace
and employer-employee relationship continue to evolve and reach newer
heights, retaining talent and ensuring efficiency is not only significant but
also achievable. HR today has a host of tools ranging from peer recognition
to remunerative benefits to a challenging workplace environment conducive
to growth among many others,” says Anshoo Gaur, General Manager and
Head, Amdocs India.
“Getting quality workforce is an activity but maintaining them is the

process. So, the end result is getting higher productivity from the people.
It has been observed that many organisations keep hiring resources but
productivity level per employee is less than 50%, which actually increases
size of an organisation but not the business or revenue. A quality and
motivated workforce always gives results beyond expectations,” notes Sunil
Goel, Director, GlobalHunt, an executive search firm.
So are organisations looking for creative ways to get the multi-generational

workforce to work together as an effective, co-operative team? While
making employees with different capabilities, ages and profiles work
together as a team is what HR departments of several organisations have
been successful in achieving, the mode deployed to do so must be in
accordance with the employee profile. Amdocs uses a mix of financial
121
MOTIVATION
incentives, subordinate-peer-senior appreciation along with a larger level of

responsibility. “Updating employees on latest happenings makes them feel
a part of the organisation and motivates them to give in their best.
Employees spend substantial hours a day at the workplace, and hence,
there is a huge scope to effectively deploy communication tools for
motivation that are in accordance with an employee’s profile, aspirations,
likes and preferences. For instance, Gen-Y employees would appreciate
social media, tweets, blogs, SMS updates, much more than a coffee table
book on a work-related subject that could occupy space on a desk in a
senior official’s cabin,” adds Gaur.
IBM is leveraging a wide range of technology tools to connect and engage

with its vast and geographically dispersed workforce. These tools help
employees feel connected to the larger organisation and also help them
establish a distinct identity for themselves. “We have been taking the
concept of social networking and applying it within the IBM firewalls to
enable collaboration and innovation. Some of the key collaborative tools
used to engage our employees are:
a. IBM BlogCentral – a site that hosts more than 1400 active blogs,
many of which spark lively dialogue on emerging technologies and other
topics germane to IBM’s business.
b. Media Library – an online centralised repository that allows IBMers to

share photos, videos, etc. with other IBMers across the globe.
c. PodSmart – an innovative way to create personalised content for

digital audio player.
IBM extensively uses podcasts to share executive interviews with the

employees through intranet.
d. ThinkPlace – an online, collaborative tool called ThinkPlace provides an

open and collaborative forum for idea generation and refinement.
Employees surface opportunities to grow the business, identify solutions
for critical client and business needs, and offer improvements for
existing problems or internal inhibitors.”
122
MOTIVATION
Convergys realises that it is vital to tap each generation’s skills and

potential for the rewards they can bring to the business. “I believe that
companies are always on the lookout for how to make such diverse teams
more effective. Knocking down parochial boundaries is a very effective way
to break the ice between various generations. We promote the use of first
names at work, for example. This immediately lends a personal touch to
team conversations. The open-door policies adopted by senior
management and other executives also helps to foster communication
between various generations at work,” says Ashish Garg, Director, HR,
Convergys India.
Face-2-Face is an employee portal that Convergys uses to enable effective

communication between senior management and employees across all
levels in the company. The use of such portals and platforms enables an
easy exchange of ideas in a one-on-one forum.
A motivated, multi-generational workforce is a phenomenal asset to a

company, especially when each member of a team recognises that they
have unique and valuable perspectives that together can help solve
business issues. For example, younger team members can bring a fresh
approach to solving a business issue, while more experienced team
members can provide their knowledge on how to transform a good idea
into an actionable business plan that will meet the team’s objective.
Whatever the route, a classic mix of fresh perspective and refined thought
is a heady concoction, which if properly channelled, helps make great
workplaces.
123
MOTIVATION
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
124
TRAINING AND DEVELOPMENT
Chapter 6
Training And Development
Objectives
• Nature of training and development
• How training process is conducted in an organisation
• The different methods of training
• How a training programme is evaluated
• The different barriers to an effective training programme
Structure:
6.1 Nature and Importance of Training and Development
6.2 Benefits of Training and Development
6.3 Process of Training and Development
6.4 Various Methods of Training and Development
6.5 Feedback of a Training Programme
6.6 Evaluation of a Training Programme
6.7 Barriers to an Effective Training Programme
6.8 Summary
125
The story continues……

Ajay Verma was on his way back to the factory. Rajesh noticed that he was
slightly disturbed.
He asked Ajay Verma ……
Rajesh: Sir, if I may ask – what is troubling you?
Ajay Verma: Rajesh, this visit has been an eye opener for me. I was
thinking that the training we provide to our workers is excellent.
Rajesh: The training is not excellent now?
Ajay Verma: No, I can see that there are some gaps and we have to
rectify them.
Rajesh: Sir, why do we require training? We are qualified enough to do our
jobs.
Ajay Verma: Yes, I know. Let me explain why I think that training is
required in addition to your qualification.
6.1 NATURE AND IMPORTANCE OF TRAINING AND

DEVELOPMENT
A. Training is the systematic and periodic upgradation of Technical/Domain

Skills of the employee – Job upgradation.
B. Development is the systematic and periodic upgradation of the Human/
Conceptual/Design skills of the employee – Job-holder upgradation.
126
Fig. 6.1: Nature of Training at Different Stages

Training and development refers to the imparting of specific skills, abilities
and knowledge to an employee. New employees in an organisation need
training to perform their duties effectively. Current employees of an
organisation must be trained so that they can perform better on their jobs
on a daily basis. Training also teaches employees different and creative
ways of working so as to increase their productivity. Training, when
provided to employees at a managerial level, helps them to attain a certain
level of maturity so that they are in a better position to lead a team.
Companies derive competitive advantage from training and development.
Training and development helps remove performance deficiencies in
employees, especially when the deficiency is caused by a lack of ability.
Training and development is effective when the individual has the aptitude
and motivation to learn to do the job better, and when the superiors are
supportive of this desired behaviour.
Training serves as an effective internal source of recruitment for the
organisation. It helps in grooming the current human resources for future
growth opportunities. At the same time, the employee’s personal and
career goals are furthered, as training adds to his abilities and value to the
organisation.
127
6.2 BENEFITS OF TRAINING AND DEVELOPMENT

Training benefits the organisation and the employees in the following ways:
• Leads to improved profitability.
• Improves the job knowledge and skills at all levels of the organisation.
• Improves the morale of the workforce.
• Helps create a better image for the organisation.
• Improves relationship between employer and employee.
• Helps in the overall organisational development.
• Organisation gets more effective decision-making and problem-solving
skills.
• Helps the organisation in development of human resources for promotion
from within.
• Aids in increasing productivity and quality of work.
• Helps in reducing costs in many functions like production, personnel,
administration, etc.
• Helps employees adapt to change.
• Conflicts are handled better thus leading to less stress and tension in the
workplace.
• Helps the individual employees in developing self-confidence.
• Provides information to employees and managers for improving
leadership, knowledge, communication skills and attitudes.
• Provides information on organisational policies, rules and regulations.
• Improves the interpersonal skills, thus helping to improve the boss-
subordinate relationship, subordinate-subordinate relationship and
relationship between the various departments and functions in an
organisation.
• Builds togetherness and cohesiveness in groups.
• Improves the morale in the organisation.
128
Rajesh: That was an eye opener for me, Sir!

Ajay Verma: Wait Rajesh! There is more…..Let me explain the process
that we follow for training and development.
6.3 PROCESS OF TRAINING AND DEVELOPMENT
Fig. 6.2: Training and Development Process

Assessment of Training Needs
Before an organisation can commit huge amounts of money for the
purpose of training and development of its employees, it needs to assess
the training needs of its employees. Assessment of training needs is
essential as it gives a direction to the training and development
programme, and ensures that the training provided is in alignment with the
goals of the organisation. It helps in ensuring the career paths of the
employees which in turn results in better quality of the employees. This
gives the organisation a competitive edge over its competitors.
Assessment of training needs occurs on two levels – group and individual.
Individuals may require new skills in case of possible job transfers and new
jobs. On a group level, training may be required if there is a change in the
organisation’s strategy or when the organisation decides to introduce a
new line of products or services.
Assessment of training needs is possible only with the support of the
organisation.
129
While conducting the assessment, the Human Resources department

examines the organisational goals and the trends that are likely to affect
these goals. After obtaining the organisational support and the
organisational analysis, it is necessary to identify what tasks are needed
for each job and which knowledge, skills and abilities are necessary to
perform these tasks. After this, an analysis of the individual employees is
undertaken to determine the knowledge and the skills which an employee
may already possess.
Deriving Training Objectives
Assessment of training needs helps in preparing a blueprint that describes
the objectives to be achieved by the trainee upon completion of the
training programme. Training objectives provides the input for designing
the training programme as well as for measuring the effectiveness of the
training programme.
Designing Training Programme
Every training and development programme must address important issues
like who will participate in the training programme, who will be the
trainers, what methods are to be used for training, what should be the
level of training, what learning principles are needed and where the
programme should be conducted. Trainees should be selected on the basis
of self-nomination, recommendations of the supervisors or by the Human
Resource department. Trainers may be immediate supervisors, co-workers,
the members of the Human Resource department, specialists from within
the organisation, consultants from outside the organisation, industry
associations, and faculty members at colleges and universities. Trainers are
selected on the basis of the skills that are to be taught. Training and
development programmes are more likely to be effective when they
incorporate the principles of learning such as employee motivation and
feedback.
130
Implementation of the Training Programme

Once the training programme has been designed, it needs to be
implemented. Implementation is difficult as most employees are too busy
in their day-to-day job activities to attend the training programme. Also,
good trainers with excellent communication skills are not easily available.
The Human Resources department has a tough time in scheduling the
training around the work duties of the employees.
Evaluation of the Training Programme
Evaluation helps in determining the effectiveness and the results of the
training programme. It helps in determining whether the training
objectives are achieved or not. Questionnaire is a simple method used to
evaluate the training programmes. Training programmes are evaluated for
their cost-effectiveness. Training costs include the needs assessment costs,
salaries of the training and development staff, trainers’ costs and
programme development costs.
Activity A
What is training and development? What are the benefits of training?
Explain the process of training and development.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Rajesh: So Sir, is this process once in the lifetime of the organisation?
Ajay Verma: No, Rajesh. We follow this process every year. Else, how will
it be effective given the various changes in our technology and business
environment?
Rajesh: Oh! Ok!
Ajay Verma: Let me tell you about the various methods of training and
development.
Rajesh: Please go ahead, Sir.
131
6.4 VARIOUS METHODS OF TRAINING AND DEVELOPMENT

Training methods can be broadly classified into two sections:
1. On-the-job training.
2. Off-the-job training.
1. On-the-job Training
As the name suggests, on-the-job training means training given while
working at the workplace. On-the-job training is an inexpensive way of
training and it does not require preparations like selection of the training
venue, organising facilities, etc. It provides a quick feedback to the trainee
and there is no disruption in the work. The motivation of the trainee to
learn is high as he is aware that his success on the job depends on the
training received. On-the-job training may not be systematically organised.
Job instruction, internship, apprenticeship, coaching and job rotation are
some of the examples of on-the-job training.
Job Instruction
Job Instruction Training is a step-by-step, relatively simple technique used
to train employees on the job. It is especially suitable for teaching manual
skills or procedures. The trainer is usually the employee’s supervisor or a
co-worker. In this method, the trainer demonstrates to the trainee how a
job is done. The trainer then asks the trainee to perform the job. Any gaps
in the trainee’s learning process are resolved immediately. After the
training is provided, a follow-up is done by the trainer to check whether the
trainee is able to perform the job without any supervision. The steps taken
to perform a job are often summarised and printed on a small card that
can be put in an employee’s wallet or pocket. The employee can refer to
the card when instructing another employee.
132
Internship
In an internship, an individual gets the opportunity to experience his/her
industry of interest before entering into it full time and opting for it as his/
her future career field. This type of training is best suited for students who
are newly graduated and who do not have any work experience as
internships are ideal for understanding the way a particular industry
functions and what it would be like to work in that industry. Such an
experience puts them in a better situation to decide whether they are
suited for a particular role/industry or not. Many companies go on to hire
their successful intern’s full time. Most internship is unpaid but some offer
a low wage or a stipend. Many of the internships are organised through
colleges and professional bodies.
Apprenticeship
It is a combination of classroom instruction and on-the-job training. It is a
training programme where an individual can earn wages while he learns a
skilled profession in a specific field, such as construction, health care, or
culinary arts. The training is done on the job while working for an employer
who helps the apprentices learn their trade, in exchange for their
continuing to work for him for an agreed period, even after they become
skilled.
Coaching
Coaching is the practice of giving sufficient direction, instruction and
training to a person or a group of people, so as to achieve goals or develop
specific skills. Usually, in an organisation, the coach is a superior or the
manager. Though coaching is a system of providing training, the method of
coaching differs from person to person, aim or goals to be attained, and
the areas needed. In order to decide the coaching methods, the coach
should know about the trainee’s aim or the goal, skills and drawbacks,
training environment, training aids needed, etc. Coaching methods includes
both theoretical and practical sections.
Job Rotation
It involves moving management trainees from department to department
to learn the different functions of the organisation. It is useful to the
management trainees as they are able to understand the basics of the
business.
133
2. Off-the-job Training
Off-the-job training happens away from a workplace. This is necessary to
get people from the stress and frustration of the workplace. Off-the-job
training enables trainees to absorb new and innovative ideas in a relaxed
environment. The only problem is that the training provided may not be
relevant to the actual events happening at the workplace. Some of the off-
the-job training techniques are:
Lectures
Lectures are a verbal presentation of information by a knowledgeable
instructor to an audience. It is used for large groups and hence the cost
per trainee is low. But there is no learning by practice. Also, since it is a
one-way communication and no feedback is asked from audience, lectures
are not so popular. However, nowadays, lecturers interact more with their
audience and frequently invite questions regarding the subject from the
audience. Lectures can be interesting when it is also used with other
methods of training.
Audio-visuals
Audio-visuals include slides, videos and films. It is used to provide realistic
examples of job conditions. The quality of audio-visuals is consistent and
hence can be controlled. But, like lectures, it is one way of communication
and hence found to be boring. Also, the presentation is standard for any
type of audience.
Computer-assisted Instruction
No trainer is involved and the information is provided to trainee in parts on
a computer. After completion of one part, the trainee has to answer
questions about the part. Correct answers to the questions are provided
after each response. If the answers of the trainee are correct, the trainee
moves to the next part. If the answers are wrong, the trainee has to repeat
the part. This method is useful as the trainee can learn at his own speed.
But the cost is high as the material has to be developed.
134
Simulation
It is a technique that duplicates as nearly as possible the actual conditions
encountered on the job. Simulation is an attempt to create a realistic
decision-making environment for the trainee. Simulations present likely
problem situations and decision alternatives to the trainee. The results of
those decisions are reported back to the trainee with an explanation of
what would have happened had they actually been made in the workplace.
The trainee learns from this feedback and improves his/her subsequent
simulation, and thereby, his/her workplace decisions in the future. The
most common types of simulation are – case study, role playing and
vestibule training.
1. Case Study: It is a written description of an actual situation in
business. The reader upon reading the case study has to examine what
is going on, assess what the real situation is or what the problems are,
and has to provide a solution as to what can and should be done to
rectify the situation or problem. Case studies are taken from the actual
experiences of organisations and they describe accurately the real
problems that managers face in their functioning. Case study is
conducted in a group environment as the best solution is arrived at only
after discussions among the participants. It is an ideal method to
increase decision-making abilities.
2. Role Playing: It focuses on human relations issues. In role playing, a
realistic situation is created and the trainees assume the parts of
specific personalities in the situation. For example, the boss may
assume the role of the employee and the employee may assume the
role of the boss. Then, both are given a typical work situation and are
asked to respond as per the roles. Role playing results in better
understanding among individuals. This in turn leads to better
interpersonal relations. Changes in attitude are another result of role
playing.
3. Vestibule Training: Vestibule training takes place away from the work
environment and it utilises equipment which closely resembles the
actual ones used on the job. The trainee is permitted to learn under
simulated conditions, without disrupting ongoing operations. Vestibule
training is advantageous as it helps the trainee to concentrate on
learning rather than being distracted by work.
135
Sensitivity Training
Sensitivity training basically focuses on gaining insight into one’s own and
others’ behaviour. Trainings are normally conducted for a small group of
employees, usually 12 to 15, with a passive trainer for observation.
Discussions focus on “why participants behave as they do, how they are
perceived by others, how they perceive others and the emotions generated
in the interaction processes”. The objectives of the sensitivity training are
to provide the participants with increased self-awareness of their
behaviour, increase in their sensitivity to the behaviour of others and
increased understanding of group dynamics. The results of sensitivity
training are increase in one’s empathy to others, listening skills and
increase in conflict-resolution skills.
Management Games
Business games are becoming highly popular in developing managers and
supervisors. Games actually duplicate selected factors in a particular
business situation. Employees and the managers learn best by being
involved in the game. The trainees are usually divided into groups. The
groups have to elect their leaders and have to organise themselves. This
develops their leadership skills and fosters teamwork and co-operation.
After the game is finished, feedback is provided to the trainees as to the
abilities and interpersonal skills displayed by them, the impact of their
decisions and the corrective actions to be taken in future and in the job
scenario. However, the trainees might be more interested in playing and
winning the game instead of concentrating on making a good decision.
Behaviour Modelling
Behaviour modelling seeks to improve interpersonal skills among the
trainees. Behaviour modeling is basically learning through observation. In
organisations, employees learn all kinds of behaviours (work-related or
otherwise) by observing supervisors, managers and co-workers who serve
as role models. Role models have a tremendous influence on individuals
and on their behaviour.
136
Seminars and Conferences

Seminars and conferences facilitate meeting together of groups of people
to seek mutual development. Such programmes can be used to
communicate ideas, policies or procedures. Issues are discussed and
debated. Seminars and conferences are also used to communicate new
developments or new trends in various fields such as finance,
management, technology, etc.
Activity B
Explain the different methods of training and development.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
6.5 FEEDBACK OF A TRAINING PROGRAMME

• Training programmes may be conducted/delivered in one or more
sessions and backed up with follow-up sessions at certain intervals after
the training is concluded.
• The purpose of follow-up sessions is to ensure that the training inputs
are being absorbed by the participants in the manner in which it is
expected by the organisation.
• Follow-up sessions serve as reinforcement opportunities for the
participants, calibration of their progress and correction if need be.
• Every session conducted needs a feedback from participants on various
aspects of the training: its focus, the style of delivery, the effectiveness
of delivery, the trainer and his/her characteristics that affect the delivery/
effectiveness of the session, the ambiance/space in which the session
was conducted, any lapses with respect to the expectations, etc.
• A feedback is unlike an Evaluation. A feedback is given on session by
session basis immediately to steer the direction and purpose of the
overall training expectations into alignment.
137
• To evaluate the effectiveness of a training programme, it is important to

have session-wise feedback of the various sessions from start till end so
that we know how the training was delivered.
6.6 EVALUATION OF A TRAINING PROGRAMME

There are two terms applicable to determine the effectiveness of a training
programme: Feedback and Evaluation.
Feedback is given by the participants at the conclusion of the training
programme on a real-time basis. Feedback is necessary to determine how
well the training has been conducted and other related parameters. The
feedback has a recency effect on the trainer and the training parameters,
and may not reflect how well the training has served the purpose for which
it was meant.
Evaluation, on the other hand, indicates the effectiveness of the training
and the purpose for which it was delivered. Evaluation is an important
process for the company to determine how well their employees have
absorbed the training, and converted into expected behaviours and result.
Modern organisations place great emphasis on training. Keeping employees
acquainted of the latest technology and training them in other “people
skills” such as negotiation, communication is considered extremely vital. In
the face of rapidly changing technology that becomes obsolete very quickly
and demanding conditions in the market, companies invest enormous time,
effort and resources to provide training to their employees. In this context,
it is but natural that the management would want to ensure that the
training imparted is of high quality and that the training process is
efficiently managed. Therefore, the process of training evaluation assumes
a place that is almost equal to the training itself.
In almost all organisations, feedback forms are distributed among the
participants after the training. The way the questions are framed has a lot
to do with the proper evaluation of the training. The questions need to be
unambiguous, precise and incisive.
138
The main questions in training evaluation should be centered on the

following aspects:
• Extent to which the training needs were achieved.
• Extent to which the individual’s expectations were attained.
• Specific information obtained through the training process.
• Probable area where the information acquired would be implemented.
Organisations, sometimes, fail to do this exercise seriously due to reasons
such as lack of time or resources in the Human Resources department. This
results in courses that are way off the expectations and requirements of
the organisation. This results in wasteful expenditure and the courses
conducted start to lose their seriousness. Evaluation of training should,
therefore, be treated as a distinct function separate from the impartation of
training.
The evaluation mechanism should have its own set of people who evaluate
the training programmes and a clear line of authority responsible for this.
Though the primary responsibility lies with the people in charge of doing
the evaluation, people at all rungs of the management ladder should be
involved in the evaluation process – from the senior management to the
trainee who receives the training.
Central to the evaluation of the training programme is the role of the
trainer himself. As the conductor of the programme, the trainer plays a
major role. The trainer has to understand the expectation of the
management, appropriately design the course content, and decide the
medium of delivery (intranet presentation, DVD/CD or distance learning).
Unlike other investments, investment in training is intangible and
traditional methods of calculation of returns such as Returns on Investment
cannot be done. This is because the benefits of training, though they can
be perceived, cannot be quantified. The return of training can be felt in
improved customer care, better output, reduced stress level and boosted
morale.
139
Training evaluation is a critical exercise necessary to ensure that the

conduction of training does not degenerate into a routine ritual and that
the entire process is accorded the seriousness it deserves. If rightly
implemented, it can focus the training effort to areas that deserve fresh
inputs and make valuable contributions to the organisation’s growth.
Rajesh: That was very informative, Sir.
Ajay Verma: Thank you, Rajesh. But training has certain barriers to it.
They are…..
6.7 BARRIERS TO AN EFFECTIVE TRAINING PROGRAMME

The barriers that affect the effectiveness of the training programme need
to be identified and addressed with the following agencies:
1. Trainer
2. Trainee
3. HR Department
4. Supervisor or HOD of the Trainee
5. Top Management
We must ensure from the start that all these five agencies are in
congruence of what is expected and what is delivered, and the outcome
thereof. The Top Management, the Supervisor and the HR department need
to brief the Trainee (Employee) on the expectations and outcomes. The
trainer who is usually external to the organisation also needs to ensure
that he is in dialogue with each of these four agencies.
There are several barriers to an effective training programme. Following
are the major barriers:
140
Lack of Commitment from Management

Most companies are reluctant to spend money on training for their
employees. They tend to disregard the importance of training or else they
concentrate on training programmes to the managers only. But in today’s
highly competitive world, it is crucial that everyone is up-to-date about the
changes in technology and production process. A highly trained worker has
the ability to solve problems and implement initiatives which could lead to
many cost benefits for the company.
Inadequate Spending on Training
Due to lack of commitment from management, many companies do not
allocate adequate amount of their budget or spending on training. Also,
during financial crisis, the first item that is reduced or cut is the budget
allocated to training.
Poaching of Trained Workers
A trained employee is more in demand than an untrained employee. Many
companies poach on their competitors’ well trained employees. This is done
as these companies do not have to incur costs on re-training these
employees. Such situations are very common in the Information
Technology field. Hence, organisations before sending their employees for
training insist that the employees sign a bond of tenure. This is especially
true in cases where the training is of a high quality or if the training is to
be provided in foreign countries.
141
6.8 SUMMARY
Training and development refers to the imparting of specific skills, abilities
and knowledge to an employee. An organisation follows a process for
training and development which involves assessment of training needs,
deriving objectives of the training, designing the training programme,
implementing the training programme, and finally, the evaluation of the
training programme. There are many methods by which training can be
conducted. These can be categorised into on-the-job and off-the-job
training methods. Job instruction, internship, apprenticeship, coaching and
job rotation are some of the examples of on-the-job training. Lectures,
audio-visuals, sensitivity training, management games and computer-
assisted instruction are some of the examples of off-the-job training.
Improved profitability and the job knowledge and skills at all levels of the
organisation are some of the benefits of training. Evaluation of a training
programme is as important as the training itself. It ensures that the
training provided contributes to the growth of an organisation. But there
are certain factors like lack of commitment from the management and
poaching of trained workers, which act as barriers to an effective training
programme.

1. What is training and development? What are the benefits of training?
2. Explain the process of training and development.
3. Describe in detail the different methods used in training and
development.
4. What are the barriers to an effective training programme?
142
1. Training and development refers to the imparting of specific skills,

abilities and knowledge to an __________.
(a) political
(b) technologies
(c) climatic
(d) employee
2. Training also teaches employees different and creative ways of working

so as to increase their __________.
(a) productivity
(b) funds
(c) profits
(d) products
3. Companies derive __________ advantage from training and

development.
(a) life
(b) competitive
(c) narrow
(d) buy
4. Training serves as an effective __________ source of recruitment for

the organisation.
(a) target
(b) game
(c) internal
(d) play
5. Assessment of __________ needs occurs on two levels – group and

individual.
(a) temperature
(b) political
(c) climatic
(d) training
143
6. Assessment of training needs is possible only with the support of an

__________.
(a) organisation
(b) funds
(c) lands
(d) bottles
7. Once the training programme has been designed, it needs to be

__________.
(a) tension
(b) implemented
(c) creation
(d) segregation
8. Evaluation helps in determining the effectiveness and the result of the

__________ programme.
(a) capacity
(b) fun
(c) training
(d) brand
9. __________ is a combination of classroom instruction and on-the-job

training.
(a) coaching
(b) seminar
(c) internship
(d) apprenticeship
10.New __________ in an organisation need training to perform their

duties effectively.
(a) employees
(b) government
(c) solution
(d) supply
Answers:
1. (d), 2. (a), 3. (b), 4. (c), 5. (d), 6. (a), 7. (b), 8. (c), 9. (d), 10. (a).
144
Related Reading
Let’s Learn
(Courtesy – Priya C. Nair, The Times of India – Ascent)
Though learning never stops, it is imperative to innovate the

process of learning, from time to time. Today, firms are devising
innovative teaching (read: training) methods to hone employee
skills. This article showcases few such fun initiatives that have
given the terms “teaching” and “learning” a new meaning.
The very mention of the word “teaching” (read: training) brings to mind
the memories of classroom, lectures, textbooks, PowerPoint presentation,
etc. But this traditional concept is giving way to e-learning, virtual
classrooms, experiential learning, etc. Corporates are devising innovative
training tools, modified training modules and strategies at par with changes
in the business and market situation to make training programmes as
exciting as possible for their employees and to impart newer learnings.
According to Tapan Mitra, Chief – Human Resources, Apollo Tyres Ltd., any
form of training, which is non-classroom-based, are tailored to cater to
specific kinds of employees and primarily enhances one’s soft skills. They
save time, foster higher interactivity and teamwork, enhance team spirit,
increase employee motivation and propagate instant learning. “In
experiential training programmes, the participants are taken to an outdoor
location where they stay in tents for a few days and participate in
adventure activities such as rappelling, rock climbing, raft making and river
crossing. This ensures that the participants work together in tandem
towards a common goal. This enables them to appreciate the importance of
communication, leadership, teamwork, planning and delegation. Faced with
challenging situations, they learn important lessons on conflict resolution,
effective communication, leadership skills, planning and teamwork,”
explains Sriram Rajagopal, VP – HR, Cognizant.
Safe hands are a series of awareness programmes for people at all levels
at the ING Vysya Bank. The set of five comic strips communicate a series
of messages, and finally, the employees are asked to choose the right
picture against a set of questions. The intent of these questions is to
ensure better engagement and ensure interest in reading through the
same. “The programme is language neutral, as every one understands the
pictorial language. This proves that learning need not always take place
145
within the four walls of a training hall; self-study too is possible,” says J.M.
Prasad, Chief of HR, ING Vysya Bank.
At Apollo Tyres Ltd., Cafe Lite programme is a three-hour workshop which

extensively uses audio-visual tools for specific behavioural competency
enhancement of employees across all levels. “There is no hierarchical
structure involved in these trainings, as people from higher (director/head)
level to the lowest (executive) undertake the training together. There are
video-assisted workshops, which ensure deeper involvement of the
trainees, apart from making the learning process more impactful. The
videos are generally a mix of real-life scenarios and dramatised role-plays.
Skills like positive attitude, team building, personal effectiveness, time
management, negotiation skills, leadership skills, planning and analysis,
etc. are imparted through this programme,” informs Mitra.
“Every month, a group of employees create a presentation on a topic they

feel is valuable for the entire organisation (for example, negotiation skills,
effective selling, time management, etc). This method gives more
inclusiveness to the training process by getting employees to create the
training materials, analyse cost-effectiveness since the dissemination is
through intranet, and also, this method fosters ‘anytime learning’ as the
audience is scattered,” says Dr. Sandeep Krishnan, VP – HR and Corporate
Affairs, Acropetal Technologies. Sobha Developers has a platform called
‘Idea Space’ through which any employee can make suggestions related to
his/her work or other functional areas on the intranet. These suggestions
are evaluated by the committee and those with a lucrative value are
segregated. Employees, whose ideas are accepted, are rewarded on the
‘Innovation Day’ of the company. “Apart from skill enhancement, initiatives
like these facilitate better team-building, 360 degree analysis and
encourage cross-functional group activities that lead to higher productivity.
When we learn as we have fun, our ability to retain the learning is far
higher,” concludes Mitra.
146
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
147
EMPLOYEE ENGAGEMENT
Chapter 7
Employee Engagement
Objectives

• What is Employee Engagement
• Framework/stages of Employee Engagement
• Need for Employee Engagement
• How Employee Engagement is implemented
• Role of HR in Employee Engagement
• Myths about Employee Engagement
Structure:
7.1 What is Employee Engagement?
7.2 Why Employee Engagement
7.3 Framework of Employee Engagement
7.4 Employee Engagement Profiles
7.5 Four Stages of Employee Engagement
7.6 Myths about Employee Engagement
7.7 Role of HR in Employee Engagement
7.8 Measurement of Employee Engagement
7.9 Summary
148
EMPLOYEE ENGAGEMENT
7.1 WHAT IS EMPLOYEE ENGAGEMENT?

Employee Engagement is a state of an employee that describes his level of
enthusiasm, dedication and sense of belongingness that he feels towards
his job function. An engaged employee cares about his work and
performance of the organisation, and strives to make a positive and
progressive difference.
7.2 WHY EMPLOYEE ENGAGEMENT?

• An employee who is engaged with his job contributes to organisation in a
much larger context than others.
• Employee Engagement contributes to the success, sustenance and
growth of the company by strongly linking job satisfaction to employee
morale.
• Employee Engagement determines how dependable and productive an
employee could be on a sustainable basis, through the various ups and
downs of the company’s business cycles.
• Today, there is ongoing need for businesses to not only manage
workforce output, but more importantly sustaining them.
• Employee Engagement is a self-driven, meaningful drive that an
employee inherently develops not restricted by compensation package or
other material rewards.
• Employee Engagement indicates that the employees work envisioning the
larger vision of the company with a sense of involved belonging.
• An employee who is “Employee Engaged” contributes more meaningfully
to the strategic initiatives than to just day-to-day operational results.
• With almost 80% business belonging to service sector, where the
external customer management is most crucial for growth of the
company, for staying competitive and forging ahead, Employee
Engagement plays a crucial role.
• It is the internal customers (employees who need to be in high morale
and employee engaged to service customers through all challenging and
unexpected limitations.
149
EMPLOYEE ENGAGEMENT
• Hence, there is a dire need for the organisation to focus and invest on
Employee Engagement initiatives.
7.3 FRAMEWORK OF EMPLOYEE ENGAGEMENT
Fig. 7.1: Employee Engagement
Employee Engagement is the strength of the mental and emotional

connection employees feel towards the work they do, their teams and their
organisation.
The organisation creates a culture which promotes employee engagement

and lays down its policies accordingly. This ensures that all HR processes
from Manpower Planning till Separation and associated functions are driven
with Employee Engagement in mind all along. Although Employee
Engagement seems to be employee-driven, it has a lot to do with
conditions created by the company. The more conducive conditions created
by the company, more the number of employees emotionally engaged.
150
EMPLOYEE ENGAGEMENT
7.4 EMPLOYEE ENGAGEMENT PROFILES

1. Disengaged: Impoverished engagement concerned only with selfish
needs – Critical, negative and disruptive.
2. Barely engaged: Indifferent to the larger picture, job security centric,

liable to leave the organisation.
3. Moderately engaged: Loves to engage but only within self-determined

safe zones, not beyond.
4. Highly engaged: Emotionally highly engaged, communicates openly

and sensitive to the larger picture.
The above four profiles are the levels which employees engage themselves
towards their job functions.
The stages are like maturity levels which needs to be nurtured by company
culture driven by HR.
Communication flow forms the backbone of employee engagement to reach

the higher levels of Employee Engagement Level 4.
7.5 FOUR STAGES OF EMPLOYEE ENGAGEMENT

Stage 1: Primary Needs
It is a socialisation process when you join a company irrespective of your

position, decides how your primary needs are satisfied, feeling and sense
of belonging.
Here, culture/climate of the organisation matters.
Stage 2: Contribution and Viewpoints
At this stage, employee tends to align himself with the company and his
individual worth and his desire for recognition, feedback and
acknowledgement.
151
EMPLOYEE ENGAGEMENT
Stage 3: A Sense of Belonging
The focus now shifts from self to the external environment – the
department, the division and the organisation. A connect between
employee and surrounding makes him develop a sense of belonging to the
company. He feels cozy and as a part of the family.
Stage 4: Room to Grow
Once comfortable, the employee focuses on long-term ambitions towards

his career in the company. The key to this is the scope for him to express
his ideas and put them into action, and communication aligned with
organisation’s vision, strategy, objectives and goals.
7.6 MYTHS ABOUT EMPLOYEE ENGAGEMENT

• Employee engagement is often directed by wrong perspective by
companies. Factors like happiness satisfaction or well-being are
considered to be indicators of Employee engagement. Hence, a company
works on policies to make them happy, satisfied and develop a sense of
well-being (Different strokes for different folks.)
• Employee engagement is inward-centric to the employee and cannot be
easily calibrated by company using such basic behavioural observations.
• Employee engagement is not an income of monetary promises/rewards.
People are engaged due to deeper psychological comfort.
• Employee engagement is long lasting rather ever last. An employee
engagement may reduce if an employee stops perceiving his connect
with the company. Companies have to nurture and sustain this continuity
through a culture-driven process.
• Employee engagement is not a strategic initiative. It has to be ingrained
in the philosophy of making of the company. It is not a planned
programme with expected outcome. It is growth and maturity of the
employee that can be expected when company gives a supportive
culture.
152
EMPLOYEE ENGAGEMENT
7.7 ROLE OF HR IN EMPLOYEE ENGAGEMENT

• Since HR acts as a door keeper to employees joining the company, it has
a crucial role to play in creating conditions that are conducive for
employee engagement.
• HR forms the bridge between the culture driven by top management and
the climate to promote employee engagement.
• HR should take the ownership of employee engagement initiatives and
hold them accountable.
• HR has to ensure that they:
– Select the right Employee Engagement partner
– Implement tools and process
– Support and develop managers
– Manage day-to-day needs and happenings related to employee
engagement.
7.8 MEASUREMENT OF EMPLOYEE ENGAGEMENT

• Conduct Employee Engagement through open-ended communication with
peers and informal groups.
• When companies are in transition like a takeover, acquisition, downsizing,
etc., feel the word and emotions of employees through Pulse surveys.
• Conduct ongoing employee life cycle surveys such as:
– New Hire Survey
– Stay Survey
– Exit Survey
153
EMPLOYEE ENGAGEMENT
Activity A
List down the names of your team mates and make a checklist of how
many of them stretch themselves extra in fulfilling the duties..
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Activity B
Rekha works for long hours at her workplace even beyond office time.
She is perceived by her colleagues as a hard working, sincere “company”
person. Do you feel this is Employee Engagement? Give reasons for your
answers.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
154
EMPLOYEE ENGAGEMENT
7.9 SUMMARY
Employee Engagement is a state of an employee that describes his level of
enthusiasm, dedication and sense of belongingness that he feels towards
his job function. It contributes to the success, sustenance and growth of
the company by strongly linking job satisfaction to employee morale. It is
the strength of the mental and emotional connection employees feel
towards the work they do, their teams and their organisation. There are
four Employee Engagement profiles: Disengaged, Barely engaged,
Moderately engaged and Highly engaged. There are four stages of
employee engagement: primary needs, contribution and viewpoints, a
sense of belonging, and room to grow. There are myths about employee
engagement in terms of observable behaviour at the workplace. One must
know how to identify and calibrate the “fake” from the real. HR plays a
pivotal role in initiating, driving and converting into employee-engaged
manpower.

1. Describe Employee Engagement in detail.
2. Why Employee Engagement is important in any organisation?
3. What are the various Employee Engagement profiles?
1. Employee Engagement is NOT about: (which one of these?)

(a) Hiring people for allocating them creative work
(b) Emotional connect of the employee with the job
(c) Willingly working towards the larger interests of the company
(d) Striving hard to grow oneself to higher levels of responsibilities
2. Employee Engagement is needed because:

(a) Companies are highly customer-oriented
(b) There us a need to retain efficient employees
(c) Self-driven people contribute more to the company
(d) All of the above
155
EMPLOYEE ENGAGEMENT
3. A Barely engaged employee is ideal for driving the company’s vision into
excellence and results.
(a) True
(b) False
(c) Both: true and false
(d) None of the above
4. In Stage 3 of Employee Engagement: A Sense of Belonging, the

employee experiences:
(a) Long-term ambitions towards his career in the company
(b) Shift from self to the external environment
(c) Alignment of himself with the company
(d) That his/her primary needs are being satisfied and he/she feels a
sense of belonging
Answers:
1. (a), 2. (d), 3. (b), 4. (b).
156
EMPLOYEE ENGAGEMENT
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
157
PERFORMANCE APPRAISAL
Chapter 8
Objectives

• What is Performance Appraisal?
• Importance of performance appraisal
• How performance appraisal is conducted in an organisation
• Different methods of performance appraisal
• Problems faced in performance appraisal
Structure:
8.1 Nature of Performance Appraisal
8.2 Importance of Performance Appraisal
8.3 Performance Appraisal Process
8.4 Annual Performance Appraisal Cycle
8.5 Current Methods of Performance Appraisal
8.6 Contemporary Methods of Performance Appraisal
8.7 Problems Faced in Performance Appraisal
8.8 Summary
158
It was the month of November and the October heat was on its way out. As
Ajay Verma made his way to the factory at Ghansoli, he felt a sense of
peace descend on him. He turned his gaze to Rajesh, his driver and asked
him:
Ajay Verma: How long has it been since you started your job with us?
Rajesh: Sir, it’s been 7 months since I started working.
Ajay Verma: I will have to appraise your performance next month.

December is the month when we appraise performances of employees.
Rajesh: What is performance appraisal?? Why is it done?
Ajay Verma: Let me explain what a performance appraisal is.
8.1 NATURE OF PERFORMANCE APPRAISAL

Performance appraisal is an objective assessment of an individual’s
performance against well-defined benchmarks. An employee is assessed on
several factors like job knowledge, quality and quantity of output,
initiatives taken by him, leadership qualities displayed by him, etc.
Performance management refers to the entire process of appraising
performances, giving feedback to the employees, and offering rewards to
them. Earlier, organisations used to focus on an employee’s past
performance only. But nowadays, organisations focus on the future
potential performance of the employee.
159
8.2 IMPORTANCE OF PERFORMANCE APPRAISAL

Performance appraisals are very useful to both – the employee and the
organisation.
Organisation’s Point of View

• Promotions are effected on the basis of an employee’s performance and
competence.
• Training and development needs of employees are assessed to:
a. Confirm the services of employees who complete their probationary

period satisfactorily.
b. Decide upon the pay raise of an employee.
c. Determine whether the recruitment, selection and training provided

have been effective or not.
d. Let the employees know where their performance stands compared

to their peers’, department’s and organisation’s performance.
e. Improve communication as the line manager can provide a clear

picture to the employee in terms of past performance and future
goals.
Employee’s Point of View

• It provides an employee an insight as to where his performance stands
while compared to his peers’ and department’s performance.
• Feedback given to him by the line manager helps him in improving his
behaviour, output and overall performance.
Ajay Verma: I hope you have understood the importance of performance

appraisal.
Rajesh: Yes, Sir. But what is involved in performance appraisal?
Ajay Verma: Let me explain the process as laid down by an organisation

and how it is conducted on an annual basis...
160
8.3 PERFORMANCE APPRAISAL PROCESS

Broadly, Human Resource department in most organisations lay down the
following performance appraisal process to be followed. The effectiveness
of the performance appraisal system lies in following all the steps laid
down. The process is as follows:
1. Objective of Appraisal
The Human Resource department should decide beforehand the objectives

of the appraisal system. It should decide whether the appraisals will be
used to improve the performance of poor performers or whether it will be
used to lay off poor performers. It also has to decide whether the appraisal
system will be used for effecting promotions and transfers, for assessing
training needs or for pay increases.
2. Establish Job Expectations
The Human Resource Manager or the immediate supervisor should inform

the employee what is expected of him/her on the job. An employee should
not start a job until he fully understands what the expectations of the
superiors are. Normally, the job expectations are laid down in the job
description. The Human Resource Manager should ensure that there is an
alignment in the understanding of the job description in the minds of the
employee as well as his immediate supervisor.
3. Design Appraisal Programme
After laying down the objectives of the appraisal system and ensuring that
the job expectations are correctly understood by the employee and his
immediate supervisor, the Human Resource department has to decide
whose performance is to be assessed, whether the immediate supervisors/
managers or clients or subordinates will rate the performance, what should
be the parameters of performance against which the employee will be
appraised, when the performance should be evaluated and what will be the
methods that will be used for performance appraisal. The Human Resource
department has also to decide whether the performance will be assessed in
terms of quantity/quality/timeliness of output, job knowledge, leadership
abilities displayed, versatility, and team spirit, congruence of the individual
goals with the organisational goals or an employee’s future potential to
perform the job.
161
4. Appraise the Performance
The Human Resource department has to ensure that the performance

appraisal is done for all the deserving employees in a timely manner. Most
of the times, performance appraisals of employees are conducted by the
immediate supervisors and it is difficult to conduct appraisals when
deadlines are to be met in the day-to-day functioning of a department. It
becomes the responsibility of the Human Resource department to see to it
that the performance appraisal is conducted and finished in the specified
time period.
5. Archiving/Storing Performance Appraisal Data
Organisations need to archive or store the performance appraisal data so

that at any point in the future, the information can be retrieved and used.
After the performance appraisal is conducted, the appraisal data is
archived/stored for future use. Issues like pay hikes, promotions, training
assessment, confirmation of probationary services, etc. are decided on the
basis of the appraisal data. Appraisal data such as the rating given to the
employee, the comments of the superiors, the training needs identified,
etc. are stored for future use.
Activity A
What is performance appraisal? Why is performance appraisal conducted?

Describe the performance appraisal process.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
162
8.4 ANNUAL PERFORMANCE APPRAISAL CYCLE

The annual performance appraisal cycle involves the following steps:
• Self-appraisal
• Preparation for the Performance Review
• Performance Review – The Meeting
• Completion of a Performance Appraisal Form
Self-appraisal
Self-appraisal is an important part of the performance appraisal process

where the employee himself gives the feedback or his views and points
regarding his own performance. Usually, this is done with the help of a self-
appraisal form where the employee rates himself on various parameters.
The employee has to be honest and objective while performing self-
appraisal. Self-appraisal ideally includes the accomplishments, the goals
achieved, the failures, the personal growth (i.e., new skills acquired,
preparation for the future, etc.), the obstacles faced during the period, the
efforts for removing them, the suggestions, and the areas of training and
development felt by the employee.
Preparation for the Performance Review
The performance review meeting should not be strictly formal nor should it
be completely informal in nature. Ideally, the review meeting should be
structured, semi-formal meeting which needs prior preparation by the
appraiser as well as the employee for it to be effective.
163
The appraiser has to prepare on the following points before the meeting:
• Inform the concerned employees about the date, time and place for the
review meeting well in advance.
• Review and be prepared with each and every employee’s job description,
performance standards, planned performance goals, performance
measures collected throughout the time period, the critical incidents
details and past appraisals of the employees.
• Provide the employee a copy of the appraisal form.
• The appraiser needs to completely understand the standards for the
employees at same level to maintain the consistency in the process.
• The feedback should be prepared in quantifiable measures wherever
possible.
• The appraiser should be familiar with the performance review form and
the details.
• The appraiser should collect as many evidences to support his/her point
as possible like the monthly and quarterly progress reports.
On the part of the employee, he should be prepared with his/her

accomplishments, initiatives taken, any cost benefits achieved by him,
situations where he has displayed leadership qualities, extra curricular
activities undertaken by him, etc. The employee should ensure that this
data is in quantifiable terms.
The employee and the appraiser both should be prepared to discuss and
figure out the future goals and training needs. They should be mentally
prepared for constructive feedback.
164
Performance Review – The Meeting
Today, performance review meetings are regarded as conversation with a

purpose. They are considered extremely important for the development
and health of the organisation. The purpose of the performance review
meetings is to reach mutually agreed conclusions about the development
of an individual and his performance, and if applicable, any areas for
improvement, including how such improvements are to be achieved. It can
be used to motivate employees to perform better in future or reinforce the
current desirable behaviour. It also should enable the employees to engage
in a dialogue and get the support of the manager about the individual’s
performance and development.
Review discussion meetings ideally include the following:

• Review of progress on tasks and activities in relation to the employee’s
performance plan.
• The developmental initiatives taken by the employee himself and those
planned by the management for the employee.
• Identification of variances in terms of delays, requisite quality and
shortfall in help planned to assist the employee, if any.
• Analysing the causes of the delay, the problems faced and the solutions
adopted.
• Preparation of action steps for solving identified problems and
contingency plans for anticipated problems.
Completion of a Performance Appraisal Form
Performance appraisal form provides the basis for the performance review,
providing the feedback to the employees and the final rating of the
employee. It also facilitates various other HR decisions and career
development plans and decisions of the employees. Therefore,
performance appraisal form should be filled with utmost care and
objectivity. Clear and unambiguous description of the employee
performance should be given in terms of “average”, “above average”,
“good” and “excellent” performance. The final rating should be mentioned.
The performance appraisal form should be approved or signed off by the
165
employee as well as his immediate supervisor. This is done so that in future

there is no ambiguity by any concerned party.
Activity B
Explain the annual performance appraisal cycle.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Ajay Verma: Now that I have explained the process, let me describe the
methods.
Rajesh: That’s wonderful Sir.
8.5 CURRENT METHODS OF PERFORMANCE APPRAISAL

Rating Scales
This is the most popular technique used for appraising the performance of
employees. Mostly, any type of job can be evaluated by using the rating
scale. The only necessity is that the job performance criteria should be
changed. A rating scale looks like the following:
Job
Poor Fair Average Good Excellent
Performance
1 2 3 4 5
Criteria
1 Initiative
2 Quality of work
3 Quantity of output
4 Attendance
5 Co-operation
6 Attitude
Total
Total score
166
Performance of the employees is rated on a scale ranging from poor to

excellent against the various job performance criteria specified. Rating
scales are very easy to use and are cost-effective. A large number of
employees, especially in a factory, can be evaluated in a short time and the
rater does not need any training. On the other hand, the rater could be
biased and thus present a wrong picture of the employee’s performance.
Checklist
Under this method, a checklist of statements on the traits of the employee
and his/her job is prepared in two columns – ‘Yes’ column and a ‘No’
column. The rater has to tick whichever column is applicable to the
employee. After this is done, the checklist is forwarded to the Human
Resource department who will do the actual assessment of the employee.
Points are allocated to every single ‘Yes’ and the total score is arrived at.
Following is an example of a checklist:
Yes No
Does the employee have adequate knowledge

1
about the job?
Does the employee comply with the safety

2
regulations?
3 Is the employee’s attendance satisfactory?
Does the employee co-operate with co-

4
workers?
Does the employee’s work meet the quality

5
standards?
As a checklist is standardised, it is easy to administer. Very little training is

required to be provided to the rater. On the other hand, the checklist items
can be misinterpreted. It also does not allow the rater to provide any
relative feedback on the performance of the employee.
167
Forced Distribution/Bell Curve Method
This method assumes that the general employee performance level

conforms to a normal statistical distribution. A normal statistical
distribution resembles a bell-shaped curve. It is assumed that 10% are
excellent or outstanding, 20% are good, 40% are average or satisfactory,
20% are below average or marginal, and 10% are unsatisfactory. The
unsatisfactory 10% are asked to improve their performances or leave the
organisation whereas promotions and pay hikes are given to the excellent
10% and the good 20%.
Fig. 8.1: Normal Statistical Distribution (Bell-shaped Curve)
The benefit of this method is that the rater cannot be lenient in providing
his rating to the employee. The disadvantage of this method is the
assumption that the employee performance levels conform to a normal
distribution. Also, it could be damaging to the morale of the employees in
the organisation.
This method has been discontinued in many organisations due to its

inherent flaws of administering and not really calibrating the overall
intrinsic worth of the employees.
168
Critical Incident Method
This method focuses on certain critical behaviours of an employee that

make all the difference between effective and non-effective performance of
a job. Examples of critical incidents are: (i) in case of a call center
employee, it could be reducing the call duration from 5 minutes to 3
minutes, and (ii) in case of a supervisor in a factory, it could be increasing
the machine utilisation in plant by 30% from last year. Critical incidents
method is useful as it is based on the actual job behaviour. Feedback can
be easily provided to the employee. On the other hand, the negative
incidents are more noticeable than positive ones. For the supervisor, the
recording of incidents might be difficult.
Behaviorally Anchored Rating Scales
Behaviorally Anchored Rating Scales (BARS) is a technique which combines

the rating scale and critical incident method. It consists of predetermined
critical areas of job performance or sets of behavioural statements
describing important job performance qualities as good or bad (e.g., the
qualities like interpersonal relationships, adaptability, reliability, job
knowledge, etc.). These statements are developed from critical incidents.
In this method, an employee’s actual job behaviour is judged against the
desired behaviour by recording and comparing the behaviour with BARS.
Developing and practicing BARS requires expert knowledge.
Essay Method
In this method, the rater describes the employee on certain parameters

like the rater’s overall impression of the employee’s performance, whether
the employee can be promoted, the jobs that the employee is able to
perform, and the training and development required by the employee. This
method is used with the other structured methods like rating scale and
checklist as it gives a description of the employee on an individual basis.
But it is a time-consuming method and it depends on the writing skills of
the raters. Also, the appraisal might be influenced with the content rather
than the actual performance of the employee.
169
Ranking Method
In this method, the superior ranks his subordinates in the order of their
merit, starting from the best to the worst. This method just focuses on that
one employee is better than the other. It does not question as to ‘how’ or
‘why’ this ranking has been arrived at. This helps in deciding the merit pay
increases, promotions and other organisational rewards. However, it suffers
from many biases such as the Halo effect.
Activity C
List down and explain some of the current methods used for performance
appraisal.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
8.6 CONTEMPORARY METHODS OF PERFORMANCE

APPRAISAL
Assessment Centres
An assessment centre typically involves the use of methods like social/

informal events, tests and exercises, assignments being given to a group of
employees to assess their competencies to take higher responsibilities in
the future. Generally, employees are given an assignment similar to the job
they would be expected to perform if promoted. The trained evaluators
observe and evaluate employees as they perform the assigned jobs and
are evaluated on job-related characteristics. The major competencies that
are judged in assessment centres are interpersonal skills, intellectual
capability, planning and organising capabilities, motivation, career
orientation, etc. Assessment centres are also an effective way to determine
the training and development needs of the targeted employees.
170
Human Resource Accounting Method
Human resources are valuable assets for every organisation. Human

resource accounting method tries to find the relative worth of these assets
in terms of money. In this method, the performance appraisal of the
employees is judged in terms of cost and contribution of the employees.
The cost of employees include all the expenses incurred on them like their
compensation, recruitment and selection costs, induction and training
costs, etc. whereas their contribution includes the total value added (in
monetary terms). The difference between the cost and the contribution will
be the performance of the employees. Ideally, the contribution of the
employees should be greater than the cost incurred on them.
360 Degree Feedback
360 degree feedback, also known as ‘multi-rater feedback’, is the most

comprehensive appraisal where the feedback about the employees’
performance comes from all the sources that come in contact with the
employee on his job. 360 degree respondents for an employee can be his/
her peers, managers (i.e., superior), subordinates, team members,
customers, suppliers/vendors – anyone who comes into contact with the
employee and can provide valuable insights and information or feedback
regarding the “on-the-job” performance of the employee.
360 degree appraisal has four integral components:
1. Self-appraisal
2. Superior’s appraisal
3. Subordinate’s appraisal
4. Peer appraisal.
Self-appraisal gives a chance to the employee to look at his/her strengths

and weaknesses, his achievements, and judge his own performance.
Superior’s appraisal forms the traditional part of the 360 degree
performance appraisal where the employees’ responsibilities and actual
performance is rated by the superior. Subordinate’s appraisal gives a
chance to judge the employee on the parameters like communication and
motivating abilities, superior’s ability to delegate the work, leadership
qualities, etc. Also known as internal customers, the correct feedback given
171
by peers can help to find employees’ abilities to work in a team, co-

operation and sensitivity towards others.
Self-assessment is an indispensable part of 360 degree appraisals.

Therefore, 360 degree performance appraisal has high employee
involvement and also has the strongest impact on behaviour and
performance. It provides a “360-degree review” of the employees’
performance and is considered to be one of the most credible performance
appraisal methods.
360 degree performance appraisal is also a powerful developmental tool

because when conducted at regular intervals (say yearly), it helps to keep
a track of the changes of others’ perceptions about the employees. A 360
degree appraisal is generally found more suitable for the managers as it
helps to assess their leadership and managing styles. This technique is
being effectively used across the globe for performance appraisals. Some
of the organisations following it are Wipro, Infosys, Reliance Industries,
etc.
Management by Objectives (MBO)
The concept of ‘Management by Objectives’ (MBO) was first given by Peter

Drucker in 1954. It can be defined as a process whereby the employees
and the superiors come together to identify common goals, the employees
set their goals to be achieved, the standards to be taken as the criteria for
measurement of their performance and contribution, and deciding the
course of action to be followed. The essence of MBO is participative goal
setting, choosing course of actions and decision-making. An important part
of the MBO is the measurement and comparison of the employee’s actual
performance with the standards set. Ideally, when employees themselves
have been involved with the goal setting and the choosing the course of
action to be followed by them, they are more likely to fulfill their
responsibilities.
The MBO Process
The principle behind Management by Objectives (MBO) is to create

empowered employees who have clarity of the roles and responsibilities
expected from them, understand their objectives to be achieved, and thus
help in the achievement of organisational as well as personal goals.
172
Fig. 8.2: Key Steps in an MBO Programme
Some of the important features and advantages of MBO are:
1. Clarity of goals: With MBO, came the concept of SMART goals, i.e.,
goals that are:
• Specific
• Measurable
• Achievable
• Realistic
• Time-bound.
173
The goals thus set are clear, motivating and there is a linkage between
organisational goals and performance targets of the employees.
The focus is on future rather than on past. Goals and standards are set for
the performance for the future with periodic reviews and feedback.
2. Motivation: Involving employees in the whole process of goal setting

and increasing employee empowerment increases employee job
satisfaction and commitment.
3. Better communication and co-ordination: Frequent reviews and

interactions between superiors and subordinates help to maintain
harmonious relationships within the enterprise and also solve many
problems faced during the period.
Team Performance Appraisal
Today, teams are becoming very common in companies. Most of the

performance appraisal techniques are formulated with individuals in mind,
i.e., to measure and rate the performance of the individual employee.
Therefore, with the number of teams increasing in the organisations, it
becomes difficult to measure and appraise the performance of the team.
The question is how to separate the performance of the team from the
performance of the employees. A solution to this problem that is being
adopted by the companies is to measure both the individual and the team
performance. Sometimes, team-based objectives are also included in the
individual performance plans.
Rank and Yank Strategy
Also known as the “Up or Out Policy”, the Rank and Yank strategy refers to
the performance appraisal model in which best-to-worst ranking methods
are used to identify and separate the poor performers from the good
performers. Then the action plans and the improvement opportunities of
the poor performers are discussed and they are given a chance to improve
their performance in a given time period, after which the appropriate HR
decisions are taken.
174
Activity D
What are the methods that will be used in future for appraising the
performance of its employees?
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Ajay Verma: We do face some problems in performance appraisal.
Rajesh: What are the problems?
Ajay Verma: The problems that we face are several but every problem
has its solution.
8.7 PROBLEMS FACED IN PERFORMANCE APPRAISAL

Performance appraisals are subject to many rating errors. These could be
due to errors in the rater’s observations and judgement. These can
seriously affect the assessment results. The most common errors are listed
below:
1. Halo Effect
This takes place when only one aspect of the individual’s performance
influences the evaluation of the entire performance of the individual. For
example, the rater could be influenced by the employee who works late
constantly and rates the employee as highly productive employee. It may
not be the true picture. Similarly, an attractive or popular employee might
be given a high overall rating.
2. Rater Effect
This includes favouritism, stereotyping and hostility. The rater gives

excessively high or low scores to certain individuals or groups on the basis
of the rater’s attitude towards the employee and not on the actual
performance.
175
3. Initial Efforts and Recent Efforts
The rater is influenced by the behaviour/performance shown by the

employee during the early stages of the review period (initial efforts), or by
the behaviour/performance shown by the employee near the end of the
review period (recent efforts). The rater has to take the composite
performance of the employee over the entire review period.
4. Past Spillover Effect
The rater is influenced by the earlier performance ratings, good or bad, and
rates the employee according to the past ratings rather than taking into
account the current performance. This is unjustified as the current
performance does not deserve the rating of the earlier good or bad ratings.
5. Status Effect
The rater holds the view that the employee’s job is of a high level, and
hence overrates the performance of the employee; and where he considers
the job is of a low level, he underrates the performance of the employee.
6. Leniency or Severity
Raters are lenient to the employees as they feel that the rating given by
them might be a poor reflection on them. They might also feel that the
relation between them and their subordinates will be affected. They might
also feel that if they are lenient in their subordinates’ rating, the
subordinates might get promoted, which will increase their own standing.
The rater might also be severe in the rating provided as they may be
unduly critical of the employee’s performance.
7. Tendency to Play it Safe
The raters are unsure as to how the employee should be rated. Hence,
they tend to play it safe and will rate the employee as ‘average’ or
‘satisfactory’. This makes it difficult to distinguish excellent performers and
poor performers, which is not advantageous to the organisation.
Such problems can be solved by the Human Resource department by

providing training, before the performance review cycle is conducted, to
the managers and supervisors who conduct performance appraisals. They
are provided training on the following aspects:
176
• Methods, techniques and guidelines for setting goals and objectives.

• How to evaluate the performance and rate the employees.
• Standards for performance documentation.
• How to complete a performance appraisal form.
• How to maintain objectivity in the appraisal.
• Questioning techniques for appraisals.
• Responding to employee reactions.
• Improving rapport and communication.
• Building morale and motivating employees.
• Observing and measuring performance.
• Tracking results.
• Structuring the interview with the focus on improving performance.
• Feedback techniques (providing constructive feedback).
• How to deal with non-performers and people who refuse to co-operate.
• Post review actions.
The training is given by conducting special workshops by either the in-

house trainers or by professional HR consultants, from outside the
organisation.
177
8.8 SUMMARY
Performance appraisal is an objective assessment of an individual’s
performance against well-defined benchmarks. It is useful in determining
pay hikes, promotions, and in the assessment of training and development
needs of the employees. The Human Resource department is instrumental
in laying down the performance appraisal process for the entire
organisation. It is also involved in ensuring that the annual performance
appraisal cycle is carried out on a timely basis. There are many methods
used for appraising the performance of the employees such as rating scale
method, bell curve method, etc. In future, performance appraisals could
include the 360 degree feedback method. Although performance appraisal
suffers from certain drawbacks like the Halo effect, status effect and
leniency or severity, these drawbacks can be reduced or eliminated by
providing training to the raters.

1. What is performance appraisal? Why is performance appraisal
conducted? List down the performance appraisal process.
2. Describe the current methods used for performance appraisal.
3. Explain the annual performance appraisal cycle.
4. What are the methods that will be used in future for appraising the
performance of its employees?
5. What are the problems faced while appraising the performance of

employees? How are they overcome?
178
1. Performance appraisal is an objective assessment of an individual’s

performance against well-defined ___________.
(a) workers
(b) benchmarks
(c) society
(d) public
2. Nowadays, organisations focus on the future potential performance of

the ___________.
(a) sand
(b) land
(c) employee
(d) money
3. Promotions are effected on the basis of an employee’s performance and

___________.
(a) restorable
(b) right
(c) reverse
(d) competence
4. The Human Resource department should decide beforehand the

objectives of the ___________ system.
(a) appraisal
(b) design
(c) degradation
(d) disputes
5. An ___________ should not start a job until he fully understands what

the expectations of the superiors are.
(a) market
(b) employee
(c) private
(d) military
179
6. The performance ___________ meeting should not be strictly formal

nor should it be completely informal in nature.
(a) generation
(b) motivation
(c) review
(d) termination
7. The ___________ should be familiar with the performance review form

and the details.
(a) money
(b) honey
(c) prompting
(d) appraiser
8. Today, performance review meetings are regarded as ___________ with

a purpose.
(a) conversation
(b) mob
(c) good
(d) bad
9. Rating scales is the most popular technique used for ___________ the
performance of employees.
(a) boundary
(b) appraising
(c) fund
(d) sand
10.As a ___________ is standardised, it is easy to administer.

(a) money
(b) paint
(c) checklist
(d) state
Answers:
1. (b), 2. (c), 3. (d), 4. (a), 5. (b), 6. (c), 7. (d), 8. (a), 9. (b), 10. (c).
180
Related Reading
Negative Criticism? Take it in Your Stride
(Courtesy – Vinnie Bhadra, The Times of India – Ascent)
Much like negative criticism, a bad performance review can easily

make one feel angry, shocked and disappointed. However, the key
lies in taking the criticism in stride and moving ahead to provide
better results.
The appraisal day is usually a time which is full of anxiety and nervous
energy for the people in the office. In the case where the review is not
positive, it can affect the performance of the individual in a negative way,
in case it is not dealt with in the proper manner. “It can become very
difficult to maintain morale and even more challenging to not harbour
feelings of hostility and resentment towards our job and our superiors in
case of a negative review. But these are just initial, visceral responses. So,
it’s important to realise that negative reviews are only part of your growth
process,” says Kamlesh Gupta, President – HR, Venus Consultants Ltd.
Shedding some light on the above topic, Gayathri Padmanabhan, a

psychologist based in Mumbai says, “When an employee receives a 360
degree negative review, it can be very demoralising for him/her. Most of
them will perceive it in a way, which speaks of their incapability to handle
their job responsibilities. This will lead to a loss of focus from their actual
goal because of which it is important to send across the review in a subtle
and easy manner.”
On the part of the employee, the most important thing that they can do is
to have self-confidence that the negative review is not a means of bringing
them down, but a stepping stone to be a better employee. “What you do
with the feedback that you receive is up to you. The important thing is that
you’ve really listened to what has been said and given yourself some time
to reflect on it. If the feedback is coming from your supervisor, you may
have to make changes if you want to do better at your job. But in the end,
it’s you who determines how you want to approach those changes,” says
Ganesh Nagadeva, VP – HR, Tricomm India.
181
In case of a negative feedback, the important thing is that you’ve really

listened to what has been said. The second step is to give yourself some
time to reflect on what is said. “Giving yourself time to reflect will help to
separate the negative feelings inside of you, so that you can think clearly,”
says Gupta.
As experts say that communication is the key to solving all major

problems, in this case too, it is helpful to communicate clearly with your
supervisors as well as colleagues and understand their point of view better.
“Don’t be shy or embarrassed to ask candid questions. Clarity regarding
your role is very important and you don’t want to miss any obvious details
that will help you in clearing the negative review,” says Nagadeva.
“Once you are crystal clear about what’s expected of you, set goals for the
future and create specific action plans that will help you achieve them.
These are known as SMART goals, i.e., Specific, Measurable, Achievable,
Realistic and Time-bound. Keep your boss in the loop as to how you’ll go
about improving your performance by setting a follow-up meeting,”
concludes Padmanabhan.
182
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
183
EMPLOYEE WELFARE
Chapter 9
Employee Welfare
Objectives
• What is employee welfare?
• Importance of employee welfare
• Various benefits provided in an organisation
Structure:
9.1 Nature of Employee Welfare
9.2 Importance of Employee Welfare
9.3 Types of Welfare Facilities
9.4 Safety Aspect
9.5 Summary

Ajay Verma: So Rajesh, will you be attending our employee welfare
workshop?
Rajesh: No, Sir. I do not understand why I should attend it.
Ajay Verma: Well, let me tell you what is employee welfare……
184
EMPLOYEE WELFARE
9.1 NATURE OF EMPLOYEE WELFARE

Welfare means the physical, mental, moral and emotional well-being of an
individual. Employee or labour welfare, as defined by ILO (International
Labour Organisation), is understood to include such services, facilities and
amenities as may be established outside or in the vicinity of undertakings
to enable the persons employed in them to perform their work in healthy,
congenial surroundings and to provide them with amenities conducive to
good health and high morale.
Employee welfare is concerned with the welfare facilities provided by an
organisation to its employees as well as the physical, health and safety
conditions of the working environment.
9.2 IMPORTANCE OF EMPLOYEE WELFARE

The welfare facilities provided by an organisation helps to motivate and
retain employees. Most welfare facilities are hygiene factors which create
dissatisfaction if not provided. Welfare facilities, besides removing
dissatisfaction, help to develop loyalty in the employees towards the
organisation.
Welfare may help minimise social evils such as alcoholism, gambling, drug
addiction and the like. A worker is likely to fall victim to any of these if he
is dissatisfied or frustrated. Welfare facilities tend to make the worker
happy, cheerful and confident looking.
Employee welfare improves the image of the organisation as a good
employer. This helps the organisation when it wants to recruit. Welfare
helps in cutting down labour turnover as a satisfied employee is less likely
to leave the organisation.
185
EMPLOYEE WELFARE
9.3 TYPES OF WELFARE FACILITIES

Welfare facilities can be broadly classified into two groups:
1. Welfare measures inside the workplace.
2. Welfare measure outside the workplace.
Welfare Measures Inside Workplace

Conditions of the Work Environment:
• Neighbourhood safety and cleanliness. Attention should be paid to the
roads leading to the factory or the organisation.
• Upkeep of premises which includes the compound wall, lawns, gardens,
passages and doors, ceilings, walls and floor maintenance.
• Workshop should be sanitised and clean. The temperature, humidity,
ventilation and lighting should be maintained. Dust, smoke, fumes and
gases should be eliminated.
• Control of effluents.
• Convenience and comfort during work, i.e., the seating arrangements
should be conducive to the posture of the employees.
• Distribution of work hours and provision for rest hours, meal times and
breaks.
• Maintenance of machines and tools, fencing of machines, providing
guards, helmets, aprons, goggles and first-aid equipment.
• Supply of necessary beverages, pills and tablets.
• Noticeboards, posters, pictures and slogans which convey necessary
organisational and safety information should be prominently displayed.
186
EMPLOYEE WELFARE
Conveniences:
• Restrooms, wash basins, bathrooms and provision for spittoons should be
arranged.
• There should be a waste disposal system.
• Provision of drinking water or water coolers should be made.
• Canteen services should be provided. Meals should be either provided
free or at a subsidised rate.
Workers’ Health Services

Some of the health services provided to workers are:
• Factory health centre.
• Dispensary.
• Ambulance.
• Emergency aid.
• Medical examination for workers.
• Health education.
• Health research
• Family planning services.
• Doctor on duty.
• Pre-hiring medical check-up for all employees.
• Periodical physical and check-up of all employees.
• First aid treatment following an accident. Training in first aid to all
employees.
• Treatment of minor complaints such as cough, cold, fever and
headaches.
• Control of occupational health hazards.
• Elimination of insects and rodents.
• Psychiatric counselling.
187
EMPLOYEE WELFARE
Women and Child Welfare

Some of the facilities that are provided to women:
• Maternity aid, crèche and child care.
• Women’s general education.
• Separate lunch rooms, toilets and rest rooms for women.
• Family planning services.
Workers’ Recreation
• Indoor games
• Library
• Internet café
Economic Services
• Co-operatives.
• Loans and financial grants.
• Saving schemes.
• Budget knowledge.
• Health insurance.
• Employment bureau.
• Transport services.
• Provident fund, gratuity and pension.
• Rewards and incentives.
• Workmen’s compensation for injury.
• Family assistance in times of need.
188
EMPLOYEE WELFARE
Labour-Management Participation
• Formation and working of various committees like works committee,
safety committee, canteen committee, etc.
• Consultation in welfare area, in production area, in the area of
administration, and in the area of public relations.
• Workmen’s arbitration council.
• Research bureau.
Workers’ Education
• Circulating library.
• Visual education.
• Literary classes.
• Adult education.
• Social education.
• Daily news review.
• Factory news bulletin.
• Co-operation with workers in education services.
Welfare Measures Outside Workplace

• Housing – quarters for bachelors and family residences.
• Water, sanitation and waste disposal.
• Roads, lighting, parks and playgrounds.
• Schools – nursery, primary, secondary and high school.
• Markets, co-operatives, consumer and credit societies.
• Bank.
• Transport.
• Communication – post, telegraph and telephone.
189
EMPLOYEE WELFARE
• Medical care, family visiting.

• Cultural programmes, festival celebrations and study circles.
• Security.
• Community leadership development, council of elders, and administration
of community services and problems.
Activity A
What is employee welfare? State its importance and list down a few of the
welfare facilities provided to employees or workers.
…………………………………………………………………………………………………………………........
…………………………………………………………………………………………………………………........
…………………………………………………………………………………………………………………........
9.4 SAFETY ASPECT

A worker’s safety is of main concern to an organisation. An organisation
should take necessary steps in the prevention of accidents. The various
steps taken by an organisation in the matter of safety are:
• Training in Safety
Systematic training of industrial employees is necessary if they are to do
their jobs efficiently and safely. This is an absolute requirement and it
should be provided to all employees irrespective of their aptitude and
experience they may possess for the jobs to which they are assigned.
Training practices in the industry are found to vary with respect to method,
content, quality, quantity and source of instruction.
It is not enough if the workers are trained on the methods of avoiding
accidents. They must also be trained on the different ways of minimising
damage, should an accident occur. Additionally, the employees must be
given instructions in first-aid procedures, including techniques for
resuscitation.
Training for workers working with chemical compounds should include what
to do and what not to do in performing the job properly. It should also
include thorough instructions on the use of special devices and procedures
in case an emergency occurs.
190
EMPLOYEE WELFARE
• Physical and Mechanical Conditions

Safety measures should be kept in mind while planning a layout and
constructing a building. Workers must be provided with safe tools and
equipment to work with. All machinery must be fenced, and mechanically
and physically unsafe conditions should be eliminated. No new machine
should be installed without being sufficiently guarded and fenced.
Protective equipment of good quality and proper size, goggles, gloves, ear
muffs, safety belts and shoes, and helmets should be supplied to workers,
who must be educated to wear them while on duty. Aisles and passages
should be free to permit easy movement of workers and materials. Proper
facilities should be provided for materials and work-in-progress so as to
prevent collision and stumbling, and also to facilitate escape in
emergencies.
Periodic inspection should be conducted to ensure safety of workers and
machines. Defective tools and equipment must be discarded. Electrical
wiring should be checked periodically.
• Role of Management, Unions and Employees
The management should believe in, and have a commitment to safety and
safety rules. Strong trade unions can force unwilling managers to
undertake safety measures. Involvement of the employees in
implementation of safety programme is necessary. Involvement binds them
to participate in the safety programme. Also, they understand the reasons
for accidents better and can offer effective suggestions to avoid them.
• Safety Posters and Film Shows
Safety posters with illustrations should be put up on the walls in the
workplace. Films on how accidents occur, on the consequences of injuries,
and the need for safety should be screened for the benefit of the workers.
Film shows are more effective than posters because of their tremendous
audio-visual impact.
• Safety Week and Awards
A safety week should be observed. Safety awards are presented by the
National Safety Council every year to industrial establishments which show
accident-free operations. Stringent action against non-compliant
organisations also help in improving safety.
191
EMPLOYEE WELFARE
• Safety Database
Data relating to accidents should be properly maintained and periodically
updated.
192
EMPLOYEE WELFARE
9.5 SUMMARY
Welfare means the physical, mental, moral and emotional well-being of an
individual. An organisation provides many welfare facilities to its
employees. Welfare facilities can be classified into welfare facilities inside
the workplace and welfare facilities outside the workplace. Employee
welfare improves the image of the organisation as a good employer. Safety
of the employees is of paramount concern to employees.

1. What do you mean by welfare? What is its importance?
2. What are the welfare facilities provided by an organisation?
3. Explain the various safety measures.
1. Welfare means the physical, mental, moral and emotional well-being of

an __________.
(a) individual
(b) resolution
(c) solution
(d) combined
2. ILO means __________.

(a) International Labour Origination
(b) International Labour Organisation
(c) International Legal Origins
(d) International Legal Office
3. The facilities provided help ________ and retain employees.

(a) bond
(b) local
(c) motivate
(d) focal
193
EMPLOYEE WELFARE
4. Welfare facilities, besides removing dissatisfaction, help to develop

loyalty in the ________ towards the organisation.
(a) agents
(b) brokers
(c) doctors
(d) employees
5. Employee welfare improves the _______ of the organisation as a good

employer.
(a) image
(b) money
(c) funds
(d) cash
6. Welfare helps in cutting down labour _______ as a satisfied employee is

less likely to leave the organisation.
(a) monetary
(b) turnover
(c) segregation
(d) segmentation
7. Workshop should be ___________ and clean.

(a) moneylenders
(b) brokers
(c) sanitised
(d) committee
8. Attention should be paid to ___________ leading to the factory or the

organisation.
(a) resolution
(b) combined
(c) solution
(d) roads
9. Safety ___________ should be kept in mind while planning layout and

constructing a building.
(a) measures
(b) government
(c) monetary
(d) financial
194
EMPLOYEE WELFARE
10.Welfare may help minimise ___________ evils such as alcoholism,

gambling, drug addiction and the like.
(a) funds
(b) social
(c) monetary
(d) fiscal
Answers:
1. (a), 2. (b), 3. (c), 4. (d), 5. (a), 6. (b), 7. (c), 8. (d), 9. (a), 10. (b).
195
EMPLOYEE WELFARE
Related Reading
Workplace Bullying
(Courtesy – Sheetal Srivastava, The Times of India – Ascent)
Much has been talked and written about workplace bullying but
what actually gives rise to it? While some call bullying the younger
sibling to violence, others look at it as a violence predictor.
Recently, there has been much discussion about workplace bullying: the
overly aggressive behaviour that makes coming to work a dreaded
necessity for many employees and one which can lead to violence.
“Workplace bullying means any sort of behaviour that is persistently
directed towards an employee or group of employees in a manner that
undermines their position within the work environment, and in the process,
affects them psychologically. It can be in the form of aggressive behaviour,
verbal abuse, physical abuse, humiliation, job insecurity threats and
spreading false rumours,” says Vaibhav Mahajan, Manager – Human
Resource, Neev Group of Companies.
Workplace bullying has always existed but has taken a more aggressive
and intense form since last few years. Says Mahajan, “Bullying at the
workplace occurs in almost every industry. It is a major concern right from
private organisations to government bodies to even educational and
medical institutions. Competitive industries like media and creative
agencies besides the mushrooming call centres and BPOs face a lot more of
work bullying cases as compared to other industries."
According to Dr. Anjali Chhabria, psychologist, “There are a variety of

reasons why a person may bully another at the workplace.” Some of the
reasons are:
Power
A person may use his/her position of power or physical dominance over

those who may be perceived to be weaker or submissive.
Self-esteem
Bullies may help put down others to boost their own self-esteem and
confidence to help deal with personal feelings of inadequacy.
196
EMPLOYEE WELFARE
Difference
An individual or group may become a target of bullying as s/he may be

perceived by others as being new or different.
Perceived Threat
Some people bully others because the other person may be seen as a
threat to them personally, or a threat to their position within the
workplace.
Organisational Culture
The culture of a workplace is the main reason for the occurrence of

bullying. When the culture is positive, it encourages individuals to adopt
appropriate behaviours that encourages respect of others. Conversely,
employees may find themselves in a negative culture where inappropriate
behaviours and attitudes are promoted or condoned by management and
bullying is seen as normal behaviour for the majority of people in the
workplace.
Bullying gets easier when there are no proper HR policies and to add to it if
there is no constant check by the top management on the same.
Workplace bullying could take place due to power disparity, organisational
culture and discouragement of employees to openly voice their
dissatisfaction or opinions. HR managers should play a crucial role in
curbing workplace bullying by encouraging employees to immediately
report any sort of repetitive bullying to ensure timely intervention by top
management team.
“Organisations need clearly defined policies regarding behavioural code of

conduct at the workplace. This coupled with sound organisation values that
are well communicated to employees set the framework for expected
behaviour and resultant work culture. In case of non-compliance,
counselling and coaching should be provided immediately. It is the
responsibility of the HR department to ensure that the behavioural code of
conduct is implemented stringently across the organisation. They must
drive this through the line managers and have a candid and continued
dialogue to address bullying related issues, if any. It is also essential that
the HR department enables two-way communication and encourages
employees’ grievances to bring the same to their notice,” says Anuraag
Maini, Senior VP – HR, DLF Pramerica Life Insurance.
197
EMPLOYEE WELFARE
So, should the HR have an explicit policy on workplace bullying? What

strategies can HR adopt to prevent such behaviours? “Typically, the HR
department ensures that the Workplace Standards Policy at DLF Pramerica
Life Insurance which refers to general harassment including bullying is
communicated in detail to every new employee, at the time of his/her
joining. This communication is refreshed at regular intervals. Resolution of
conflicts, counselling, giving feedback, etc. are other ways by which we
contribute towards a safe working environment,” adds Maini.
“HR professionals need to have a clear and explicit policy about what is
acceptable behaviour and what is not. Potential aggressors are often
cranky or aggressive on the job long before they explode and commit acts
of violence. HR professionals should identify these potential aggressors
during the hiring process and avoid them. We try and get information of
the new employees from their previous employer. We also have community
programmes that offer people training in anger management,” adds
Mahajan.
Given the sensitivities involved in dealing with workplace bullying, the need
of the hour is to have mature and competent leaders/ managers who will
be able to spot early signs and nip the issue in the bud.
198
EMPLOYEE WELFARE
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
199
COMPENSATION ADMINISTRATION
Chapter 10
Compensation Administration
Objectives
• Nature and Importance of compensation
• The various factors affecting compensation
• The different components of compensation
Structure:
10.1 Nature and Importance of Compensation
10.2 Factors Affecting Compensation
10.3 Various Components of Compensation
10.4 Cost to the Company (C to C)
10.5 Summary

Ajay Verma: So Rajesh, your appraisal is over. Has the HR department
given you a letter giving details of your new compensation?
Rajesh: No, Sir. I have not received any letter from HR. And, what is this
new term – compensation? I only receive my monthly salary.
Ajay Verma: Well Rajesh, your monthly salary is a part of your
compensation. Let me explain to you what compensation means.
200
10.1 NATURE AND IMPORTANCE OF COMPENSATION

Compensation is the total reward received by an employee in exchange for
services performed for an organisation. It can include both direct pay
(salary and wages) and indirect pay (benefits programs). In order to
provide additional incentive to attract quality employees, as well as keep
competent workers who are already associated with the company, many
businesses offer a compensation package that is much more detailed than
simple salary or wages. The compensation package may include a number
of other benefits, including insurance, employee discounts, extended leave,
and retirement programmes. Compensation packages vary greatly from
one industry type to the next. Yet, all of them address the matter of
consistent compensation through the process of a wage or salary. Wage
and salary requirements are usually agreed upon before the employee
begins work, and becomes the foundation for the compensation package.
The details of the wage or salary may also include guarantee of increases
from time to time, based on either the cost of living or the job performance
of the individual.
Along with basic compensation, there is usually some sort of process that
guarantees pay during leave. Another basic aspect of the compensation
package is often some form of health insurance. This may be a benefit that
is extended to the employee and is paid for by the company, or the
company may choose to pass part of the cost along to the employee in the
form of a payroll deduction.
Other types of benefits may also be included in a compensation package.
For instance, if the employer manufactures a good or service, such as
home textiles, the employee may receive a discount for purchasing finished
goods from company operated stores. A compensation package may
include guarantee for reimbursement of any out-of-pocket costs the
employee incurs while performing his or her job responsibilities.
Retirement plans may vary from simple accruals of matched deductions
from the weekly or monthly paycheck to mutual funds. The range of
benefits that may be included in a compensation package can include the
use of a company car, cell phone service, and office equipment for working
at home, or any other type of benefit that the company wishes to extend.
201
A fair compensation system is a must for every business organisation. The

fair compensation system will help in the following:
• An ideal compensation system will have positive impact on the efficiency
and results produced by employees. It will encourage the employees to
perform better and achieve the standards fixed.
• It will enhance the process of job evaluation. It will also help in setting
up an ideal job evaluation and the set standards would be more realistic
and achievable.
• It should not result in exploitation of workers.
• It will raise the morale, efficiency and co-operation among the workers.
It, being just and fair, would provide satisfaction to the workers.
• Such system would help management in complying with the various
labour acts.
• Such system should also solve disputes between the employee union and
management.
• It should motivate and encourage those who perform better and should
provide opportunities for those who wish to excel.
• Sound Compensation/Reward System brings peace in the relationship of
employer and employees.
• It aims at creating a healthy competition among them and encourages
employees to work hard and efficiently.
• The system provides growth and advancement opportunities to the
deserving employees.
• The perfect compensation system provides platform for happy and
satisfied workforce.
• This minimises the labour turnover. The organisation enjoys the stability.
• The organisation is able to retain the best talent by providing them
adequate compensation thereby stopping them from switching over to
another job.
• The business organisation can think of expansion and growth if it has the
support of skillful, talented and happy workforce.
• The sound compensation system is the hallmark of organisation’s success
and prosperity.
202
• The success and stability of an organisation is measured with pay

package it provides to its employees.
Activity A
What is compensation? Describe its importance.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Ajay Verma: I hope you have now understood what compensation means
and what its importance is.
Rajesh: Yes, Sir.
Ajay Verma: Let me now explain to you the various factors that affect
compensation.
10.2 FACTORS AFFECTING COMPENSATION

A number of factors influence the compensation payable to employees.
They can be categorised into external and internal factors.
External Factors
Labour Market
Demand for and supply of labour influence wage and salary fixation. A low
wage or salary may be fixed when the supply of labour exceeds the
demand for labour. A higher salary or wage will have to be paid when the
demand exceeds supply. Nowadays, the trend is that there is more supply
of unskilled labour than skilled labour. Hence, organisations pay high
compensation to skilled labour to attract and retain them. At the same
time, unskilled labour has to be paid a justifiable wage or salary.
Labour Unions
The presence or absence of labour unions often determines the amount of
wages paid to employees. Employers in non-unionised factories enjoy the
freedom to fix wages and salaries. Labour unions pressurise organisations
to pay employees the legal minimum wage, and collectively, they bargain
for increase in the wages of the workers. Thus, labour unions determine
and revise the pay scales of the workers in the organisation.
203
Cost of Living
This is a very important factor especially during times of rising prices. Cost
of living reduces the real wages of the workers. Care should be taken to
ensure that while fixing the wages, the cost of living is considered. A rise in
the cost of living is sought to be compensated by payment of dearness
allowance.
Labour Laws
Labour laws have been passed to ensure that the workers or employees
are not exploited by the organisations, and that they are paid their just
dues. Labour laws like the Payment of Wages Act 1936, the Minimum
Wages Act 1948, the Payment of Bonus Act 1965, Equal Remuneration Act
1976 and the Payment of Gratuity Act 1972, all ensure that the payment of
wages and other dues is paid by the organisation to the workers. These
acts safeguard the rights of the workers or the employees.
Society
Compensation or remuneration paid to employees is reflected in the prices
fixed by an organisation for its goods and services. As the general public
consumes the products and services of the organisation, they are
interested in the compensation decisions of the organisation.
Economic Conditions
The state of the economy also plays a role in the determination and
fixation of wage and salary. When the economy is in a recession,
organisations cut down on the compensations of its employees. Whereas,
when the economy is in a boom period or prosperity period, the
organisation will pay handsome compensation to its workers.
204
Internal Factors
Business Strategy
The overall strategy which a company follows determines the compensation
that it pays to its employees. If the strategy of the company is to achieve
growth rapidly, the compensation will be higher than what its competitors
may be paying. If the strategy is to maintain the current savings or to
reduce costs, then the company will pay average or below average levels of
compensation.
Performance appraisal helps award pay increases to employees who show
improved performance. If the organisation wants to retain its key and high
performing employees, then it will pay a handsome compensation package
to them. If the organisation wants to cut down its staff and reduce the
number of poor or unsatisfactory employees, it will not increase their
compensation package thus forcing these employees to quit.
Employee
Employee-related factors like performance, seniority, experience and
potential determine an employee’s compensation. An employee’s
performance is always rewarded with an increase in the pay. Sometimes,
organisations pay on the basis of the seniority of the employee. This is
especially true in case of the compensation paid to the organisation’s top
management.
Activity B
Describe the various factors that affect compensation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Rajesh: Thank you, Sir. But I still do not understand the relation between
salary and compensation...
Ajay Verma: Well Rajesh, salary is one component of compensation. Let
me explain to you the various components of compensation package.
205
10.3 VARIOUS COMPONENTS OF COMPENSATION

The various components of compensation are:
Wages
Wages refer to the hourly rates of pay paid to workers. They are subject to
annual increments, and they differ from employee to employee. They also
depend on the nature of job, type of industry, seniority and merit. Based
on the needs of the workers, capacity of the organisation to pay and the
general economic conditions prevailing, wages can be classified into three
categories – minimum wage, fair wage, and living wage.
Minimum wage is usually fixed by labour laws and it is the one which
provides for the basic living conditions. It also ensures that the wage is
sufficient enough for the worker to some education, medical requirements
and amenities.
Fair wage is equal to the wage rate prevailing in either the same trade or
similar kind of work. It is fixed only by comparison with an accepted
standard rate and such standard rates are fixed where the workers are able
to bargain with the employers or organisations.
Living wage is described as the wage which enables the worker to provide
for himself and his family with the basic requirements like food, clothing
and shelter. It also ensures that the wage is sufficient enough for the
worker to provide education for his children, medical facilities and
insurance for his family. A living wage is fixed by taking into consideration
the general economic conditions of a country. Hence, the living wage is
different from country to country. In developed countries like USA and UK,
the living wage is the minimum wage.
Salary
Salary represents the monthly rate of pay paid to employees. Salaries are
revised on an annual basis and are subject to annual increments. They
differ from employee to employee. Salary depends on number of factors
like the nature of job and the type of industry. It is normally paid to
executives based on what they can do and their performance. It is not paid
on the basis of the demands of the job. It is also subject to deductions at
source. In order to overcome the shortfall, the executives are paid hefty
incentives and attractive perks.
206
Bonus
Bonus is usually short-term incentive (annual) and is based on
performance. For this purpose, the definition of performance is very
crucial. In some organisations, the annual bonus is tied to the share price
of the return on investment. In other organisations, bonus is decided by
the Board of Directors and the Chief Executive Officer. In some
organisations, bonus is given after certain established targets have been
achieved. Organisations give out a bigger amount of bonus to its
executives as they have much more opportunities to influence
organisational success than non-managerial staff.
Commission
Commission is normally paid to the salespeople or the marketing
department. It is paid upon the achievement of certain established sales
targets. The commission is normally calculated as a certain percentage of
sales.
For example, the sales force of an organisation may have a target to
achieve sales of ` 1 lakh in a month. If they achieve this target, then they
are promised a commission of 15% of the sales.
Commissions are paid so as to ensure that the morale of the salespeople is
high and that they are motivated to generate more revenue for the
organisation. Increase in sales mostly leads to increase in profits and
profits are crucial to the survival and growth of an organisation.
Stock Options
Stock options are long-term benefits offered to executives. Companies
allow executives to purchase their shares at fixed prices. Stock options are
valuable as long as the price of share keeps increasing. They are a form of
profit sharing that links the executive’s financial success to that of the
shareholders. They are awarded to the top- and middle-level management,
as a reward for their high performance. Stock options can also be used as
a retention strategy. For example, if an employee completes certain years
of work experience with an organisation and is a key performer, he is
awarded the option to buy the stocks of the company.
207
Perquisites
Perquisites or perks constitute a major source of income for executives.
Typically, perks to executives include the following:
1. Membership in clubs.
2. Well furnished houses.
3. Medical expense reimbursement.
4. Reimbursement of servant’s salary, telephone bills, electricity and gas
bills, and petrol and fuel expenses.
5. A company provided car.
6. Entertainment allowance.
7. Special dining privileges.
8. Reimbursement of credit card bills and mobile phone bills.
9. Reimbursement for children’s education (school or college) expenses.
10. Professional meetings and conferences.
11. Holiday homes.
12. Spouse travel.
13. House rent allowance.
14. Conveyance allowance.
Life Insurance
Most organisations provide life insurance plans to its employees. The
organisations take these policies on a group basis as the insurance
companies accept all the employees regardless of the health or physical
condition. The health and physical conditions of the employees are tested
by the organisation when they are selected to join the organisation.
Mostly, the organisation pays the base premium, which usually provides life
insurance and the employee pays for any additional coverage. Sometimes,
the cost of the base premium is split between the organisation and the
employee on an equal basis or any other basis laid down by the
organisation.
208
Medical Insurance
Health and hospitalisation is a big concern for many people and it plays a
major role in their choice of employer, as medical insurance is very
expensive. Most organisations, therefore, offer their employees some type
of medical and hospitalisation insurance. Most medical insurance plans
provide at least basic hospitalisation, surgical and medical insurance for all
eligible employees at group rates. Most plans pay for hospital room and
board, surgery charges, and medical expenses including doctor’s visits to
the hospital. Some organisations also pay for major medical expenses
resulting from long-term or serious illnesses.
Mostly, organisations also pay for the medical insurance premiums of the
employee’s dependents – parents, spouse and children.
Sometimes, organisations also sponsor insurance plans that help cover
health-related expenses like eye care and dental services. Many
organisations offer membership in a health maintenance organisation as a
hospital/medical option. The health maintenance organisation is a medical
organisation consisting of specialists like surgeons, psychiatrists, etc. and
operating out of a health care centre.
Pension
It is a fixed sum received by the employees when they reach a pre-
determined retirement age or when they can no longer work due to
disability. Pension plans can be either contributory or non-contributory.
Contributory pension plans are those plans where the employee and the
employer both contribute a certain amount on a monthly basis. Non-
contributory pension plans are those plans where only the employer makes
the contribution to the pension plan. Organisations enjoy tax benefits when
they contribute to the pension plans.
Gratuity
It is a lump sum amount paid by the organisation to the employee when
the employee retires from the service. It is calculated as the basic salary
for each completed year of service.
For example, if an employee at the time of retirement has a basic salary of
Rs. 15,000/- and he has completed 10 years of service in the organisation,
then the gratuity that will be payable by the organisation will be Rs.
1,50,000/-.
209
Gratuity will be paid only when both the organisation and the employee are
in agreement over the expiry of the contract of the employee. It will not be
paid if the employee has left the organisation over a serious fault
committed by him.
Supplemental Pay Leave
Supplemental pay leave refers to the pay for time not worked. It includes
holidays, vacations, sick leave, maternity leave and paternity leave.
Vacations and Holidays
The number of paid employee vacation days is different in various
organisations. Normally, organisations provide 28 to 30 days of vacation on
an annual basis. But due to work pressures, sometimes this annual
vacation is not availed by the employees for years. At the end of a year,
employees encash (in money) the pending days of vacation. Nowadays,
banks and outsourcing companies follow strict norms and instruct their
employees to avail a compulsory vacation of 10 days, on an annual basis.
This is a statutory requirement for SOXA audit.
Sick Leave
Sick leave provides pay to employees when they are out of work due to
illness. Most sick leave policies grant full pay for a specified number of sick
days – usually up to about 12 days per year. The sick days, usually,
accumulate at the rate of one day per month of service. Sick leave pay
causes difficulty for many employers. The problem is that while many
employees use their sick days only when they are genuinely sick, others
use sick leave as extensions to vacations, whether they are sick or not. To
reduce this problem, many employers, at the end of the year, pay their
employees a daily equivalent sum for each sick leave day not used.
Maternity Leave
About half of the employees are women and most of them will become
pregnant during their work lives. Most organisations provide either 90 days
or 180 days of maternity leave to the women employees. In such cases,
the women employees are paid their full respective salaries and all the
other benefits due to them. Also, organisations pay for the hospital
expenses incurred by the women employees at the time of delivery.
210
• Paternity Leave
This is a recent trend noticed in many organisations. This leave is granted
to the father when his baby is born. The organisation usually provides 3
days of leave to the father. The organisation pays the salary and all the
benefits of the father during this time.
10.4 COST TO THE COMPANY (C TO C)

• In recent times, a new system of compensation has been in practice by
many organisations termed as C to C OR Cost to the Company.
• C to C includes the cost that company incurs on the employee, not just
the monthly compensation, perks, bonus, etc., but also the cost it incurs
on maintaining, motivating and developing the employee. Hence, cost to
the company covers the intangible which are offered to the employee for
his role and growth.
Why C to C?
• C to C has been in practice because the organisation connects its cost to
the expected output by the employee.
• When the employee is made to realise that the organisation is bearing
cost towards him besides what is obvious (like salary, PF, gratuity, etc.),
the commitment and the motivation of the employee is supposed to be
higher than usual.
• The C to C concept, moreover, raises the chances of the employee
perceiving his/her role with the larger picture in mind, chances of
employee engagement and their retention would be high.
211
Notable Features of C to C
• C to C has some features which are not clear to many employees unless
they communicate and ask for details at the time of taking up the job
offer.
• There are two components: financial and non-financial, and two time
frames: medium and long term that needs to be understand about C to
C.
• C to C quantifies into monetary terms, both the financial and non-
financial compensation given to the employee while the financial part is
clear, the non-financial part is highly complex and needs a skillful person
to understand how it is created and to explain to the employee.
• Again, C to C breakup has component which impacts the employees in
the near/medium term in terms of take home changes and those which
are to impact this take home in the long-term.
• Thus, the HR department has to clearly state to the employee about
these aspects, so that his decision-making to join the company is
facilitated.
Take-home Compensation
• Conventionally, employees have been used to understand their monthly
home cheque amounts easily when the components of compensation
were monetary in nature and also near/medium term time frame.
• After introduction of C to C, there has been a lot of confusion over how to
comprehend the connection between the two: C to C and take-home.
• Especially, when an employee is being hired, to negotiate a compensation
using C to C gets challenging.
• It is important to compare Take-home (existing) to Take-home
(expected), and communicate it clearly when the C to C breakup is not
clear in the mind of the employees.
• Moreover, employees have their own agenda about time they stay in the
company. Hence, the near/mid/long-term monetary aspect of the C to C
has to be also understand from this point of view.
212
• As compensation is a very sensitive aspect of an employee’s life in the

organisation, HR needs to clarify the breakup of C to C so that no
assumption or misunderstandings occur.
213
10.5 SUMMARY
Compensation is the total reward received by an employee in exchange for
services performed for an organisation. A sound compensation system is
the hallmark of an organisation’s success and prosperity. Compensation is
affected by many internal factors such as business strategy, performance
appraisal and employee, and by external factors such as economic
conditions, society, labour unions and labour laws. Wages, salary, bonus
and pension are a few components of the compensation package which an
organisation provides to its employees.

1. Explain the term compensation. What is the importance of a fair
compensation system in an organisation?
2. Describe the various internal and external factors that affect
compensation.
3. Explain the various components of compensation.
1. Compensation is the total __________ received by an employee in

exchange for services performed for an organisation.
(a) most
(b) frost
(c) reward
(d) erase
2. Compensation __________ vary greatly from one industry type to the

next.
(a) indirect
(b) solution
(c) combined
(d) packages
214
3. Retirement __________ may vary from simple accruals of matched

deductions from the weekly or monthly paycheck to mutual funds.
(a) plans
(b) marketer
(c) broker
(d) buyer
4. A fair __________ system is a must for every business organisation.

(a) lawyer
(b) compensation
(c) creditor
(d) broker
5. An __________ compensation system will have positive impact on the

efficiency and results produced by employees.
(a) rain
(b) water
(c) ideal
(d) land
6. Demand for and supply of labour influence wage and salary

__________.
(a) goods
(b) bond
(c) options
(d) fixation
7. The presence or absence of labour __________ often determines the

amount of wages paid to employees.
(a) unions
(b) balance
(c) prayer
(d) lawn
215
8. Performance appraisal helps award pay __________ to employees who

show improved performance.
(a) marketer
(b) increases
(c) worker
(d) employers
9. Payment of Gratuity Act __________.

(a) 1890
(b) 1876
(c) 1972
(d) 1967
10. Payment of Bonus Act __________ .

(a) 1988
(b) 1909
(c) 1976
(d) 1965
Answers:
1. (c), 2. (d), 3. (a), 4. (b), 5. (c), 6. (d), 7. (a), 8. (b), 9. (c),

10. (d).
216
Related Reading
Negotiate Your Way
(Courtesy – Priya C. Nair, The Times of India – Ascent)
In today’s corporate scenario, it has become imperative for

working professionals to hone their negotiation skills, in order to
derive maximum career benefits.
We all negotiate in our daily lives, don’t we? We demand discounts during
our shopping expeditions, argue with the vegetable vendor hoping he
would reduce costs, try politely persuading the client before closing a deal,
convince our bosses to give a decent hike in the next appraisal season and
even negotiate with little troublesome children these days by ‘bribing’ them
with chocolates. Clearly, negotiating today has become an art. Whatever be
the reason, experts say that negotiations at work must be considered as a
process to find a solution to a problem in a tactful manner.
Let’s take the case of salary negotiations. Before going in for a negotiation,
it is important for the person to be well-prepared. “He/she must first
evaluate his/her worth. If the employee has not added value to the
company, then he/she should refrain from the discussion of pay hikes,”
says Pramath Nath, HR, business partner for Asia, Pacific and Japan,
Hewlett-Packard GBS. “The person negotiating for a pay-rise must measure
his/her contribution before he/she arrives at suitable figure for pay-rise
negotiations,” adds Pushpendra Mehta, Career Strategist and CEO,
VCherish.com. Adding to it, Murli A. Mehta, Director, Inter Gold India (P)
Ltd. Says, one must do the homework well as to why he/she should get the
hike. “Ask yourself the questions your boss could ask you. Envisage the
counter arguments, and identify and plug those loopholes in your
arguments,” suggests Murli Mehta.
Apart from preparation, choosing an appropriate time for the discussion is

also significant towards making it a fruitful one. Experts say that it is good
to fix an appointment with the manager when he/ she is free and have the
time to hear you. Before getting into the discussion, it is a must to have a
list of accomplishments he/she had in the previous year to justify the
demand. “The best argument in negotiations is triple P – your Powerful
Past Performance. Have a brief, well structured report of your
achievements with a separate file of cumulative record before you get into
the discussion,” says Murli Mehta.
217
The way you present your request before the manager is also important.
Experts say that discussions must be in a diplomatic manner and personal
reasons should not be a part of official negotiations. “The person must
focus on a win-win relationship with his/her employer. He/she must
communicate the contributions and commitment tactfully and effectively,”
suggests Mehta.
Sometimes, it is easy to negotiate and get what you want, but at times, it
becomes a difficult task to convince the person on the other side. So, even
if the negotiation tactic fails, it is advisable not to get argumentative or
aggressive, because it will reflect negatively on you.
218
Related Reading
Asking for a Raise
(Courtesy – Sakshi Singh, The Times of India – Ascent)
The budget has been announced, the financial year is coming to an end but
what you are most interested in is the finances in your near future. Is it
going to be a hike? Are perks in order? While waiting and wondering is
alright to do, a little proactive approach hurts no one. Looking for a raise
and hoping to climb up a notch? Here is what HR has to say about asking
for a raise.
Approaching the Subject
It is certainly not an easy subject to touch upon whether it is with your

HOD (Head of Department) or your HR manager. What is the best way to
tackle the situation? How do you plan the interaction in the best possible
way? Rajeshwar Tripathi, Executive Vice-President – HR, Farm Equipment,
Mahindra & Mahindra says, “It’s not often that people would apply for a
raise. However, if they do, it should be considered more as a feedback from
them and then process it while formulating their compensation plan.”
There are several ways of applying for a raise and organisations may
handle the requests differently. “Individual raise requests are rare and they
only happen while hiring or in case the person has quit and we plan to
rehire them. It’s best to ask and appreciate feedback of the employees and
how they perceive their compensation; this is the healthiest form of taking
up the subject. HR can then do benchmarking at various levels of
performance, the industry paying standards and then arrive on a
compensation plan,” says Tripathi.
Lastly, it is always better to gather some support for your cause instead of
you hooting for yourself all alone. “Share with HOD: Rather than walking
straight to the CEO/HR’s cabin, it will be a good idea to first take your HOD
in confidence of your intention, and once he supports you, there are better
chances of you getting the hike when he escalates it to the senior officials.
In short, make your plea to raise a very objective, professional and fact-
based request rather than an overly emotional, impulsive or immature
demand,” adds Dixit.
219
Raise Request! The “No-No’s”
So, you feel you deserve a pay hike but yet you do not know how to go
about it. Does it have to be over e-mail or a formal meeting is required? Do
you need to follow a procedure? What is the deal? Although it is fair for you
to let the HR be aware of your feelings and feedback, you do not want to
end up rubbing them the wrong way. “Asking the HOD or HR for a raise on
the grounds that you will resign or not multitask without a raise is a bad
idea as it most often snubs the HOD in a wrong way. One might get some
hike or commitment at that moment, but in the long run, such employees
are replaced easily. Similarly, asking for a raise less than 9-12 months from
last increment is not just greedy but against most company rules,” says
Meghna Dixit, VP and Group Head – HR & OD, Maya Entertainment Limited.
Ask and You Shall Receive!
Plan your meeting and play safe while you want to make that big request.
So, when is it really OK to ask for a raise? And how do you go about it?
One can ask for a raise in the week after the last big success,
breakthrough, and innovation that one brought about and was recognised
for by the HOD/HR. The request should sound like a request with all
humility and should not be all money based. Rather than asking for a 25%
hike, one can say “I am looking for a 20-30% hike and growth prospects in
the company as I feel I am delivering my tasks as expected,” conclude.
220
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
221
SEPARATION
Chapter 11
Separation
Objectives
• Nature of Separation
• The different types of separation.
• How to manage separations effectively.
Structure:
11.1 What is Separation
11.2 Different Types of Separation
11.3 How to Manage Separation Effectively
11.4 How to Minimise Labour Turnover/Reduce Attrition
11.5 Summary

On the next trip to the factory, Ajay Verma notices that Rajesh, who was
normally cheerful, was looking sad and forlorn.
Ajay Verma: What is the matter, Rajesh? Why the sad face?
Rajesh: What to tell you, Sir? I just joined the organisation and now I
hear that one of my friends, Vasu, is leaving the organisation.
Ajay Verma: But then, Rajesh, this is a part of life and it is a part of the
HR cycle. Let me explain to you. Perhaps, it will help you to handle
Separation.
222
SEPARATION
11.1 WHAT IS SEPARATION

Separation occurs when an employee leaves the organisation. Separations
can be either voluntary or involuntary. In voluntary separations, the
initiation for separation is taken by the employee himself. In involuntary
separations, the initiation for separation is taken by the employer. In
involuntary separations, the employee harbours feelings of injustice and
may seek legal protection to undo it.
Organisations become leaner, there is saving in the compensation
amounts, and new entrants hired to fill the vacant jobs bring in new ideas
and experience along with them. Turnover can also help infuse greater
diversity in the workforce. On the other hand, turnover disrupts employee
morale. Also, instead of reducing costs, it may add to the cost. Costs of
turnover include retirement costs, and hiring and training costs of new
employees.
11.2 DIFFERENT TYPES OF SEPARATION

Voluntary Separations
Voluntary separations occur when the employee decides to terminate his
relationship with the organisation. It can be further classified into
resignations and retirements.
• Resignations/Quits
An employee resigns or decides to quit when his level of dissatisfaction
with the present job is high or when he has secured a better job in another
organisation or for some personal reasons or when the employee suffers
from ill-health. The reasons for dissatisfaction could be the job itself or
supervision, compensation, advancement opportunities, spouse relocation
or some other reason. During times of prosperity or economic boom, jobs
are easily available to competent people.
223
SEPARATION
• Retirements
Retirements occur when employees reach the end of their careers.
Retirement differs from resignations. When the employee retires and
leaves the organisation, he avails of several benefits like gratuity, pension,
etc. Such a privilege is denied to the employee who quits. Also, retirement
occurs at the end of an employee’s career but the resignation can take
place at any time. The retirement is amicable and there are no hard
feelings with the employer or the employee. In resignation, there might
be hard feelings either with the employer or the employee.
Involuntary Separations
Employers resort to terminate employment contract with employees for the
following reasons:
a. Organisation is passing through tough times financially and is unable to
maintain the existing labour.
b. Employee shows deviant behaviour, which affects the environment in an
organisation or which is against the organisation culture/policies.
c. Faulty hiring results in mismatch between job and employee fit.
Discharges, layoffs, retrenchment, voluntary retirement scheme (VRS) and
rightsizing are the common methods of involuntary separation.
• Discharge or Dismissal
Discharge takes place when the organisation discovers that it is no more
desirable to keep an employee any longer. It should be avoided as far as
possible because any discharge or termination is a reflection of the
company’s human resource system. Also, in such a case, the organisation
has to find a replacement, and hire and train the new employee. This
involves costs. Also, a terminated or dismissed individual is likely to speak
badly about the organisation.
The following reasons lead to the dismissal of an employee:
a. Excessive absenteeism.
b. Serious misconduct.
c. Theft of company’s property.
d. Espionage.
224
SEPARATION
e. Submitting false qualification statements or the experience certificates

at the time of employment.
This method is to be used as a last resort and only after all efforts have
been made by the organisation to salvage the employee have failed.
Layoffs
A layoff is a temporary separation of the employee at the request of the
employer. Layoff is the failure, refusal or inability of an employer to provide
employment to an employee whose name is present on the rolls of the
company but who has not been retrenched. A layoff may be for a definite
period. After this definite period ends, the employee will be recalled by the
employer for duty. Mostly, this period can extend to any length of time and
the employer is unable to estimate when the employees will be recalled.
Layoffs could be due to shortage of raw materials, economic recession,
accumulation of stocks, or for any other reason.
Industrial Disputes Act, 1947 makes it mandatory on the part of the
employer to pay compensation for all the days that an employee has been
laid off. Compensation must be half of the normal wages the employee
would have earned, if he was working.
Basis of the layoff may be either on merit basis or seniority basis. If it is on
the merit basis, then the employees with poor or unsatisfactory
performance are laid off first. For this purpose, performance appraisal is
used to establish who is inefficient or below expectations. If seniority is the
basis, then employees with the shortest period of service are first laid off
and the older employees are retained as long as possible.
At the time of recall (after the layoff period is over), the organisation
recalls their key employees. Employees with the longest period of service
(seniors) are recalled first and then the employees with the shortest period
are recalled. Also, the management may seek to recall those employees
whose skills are essential for the resumption of production or services.
225
SEPARATION
Retrenchment
It refers to the termination of the services of employees because of the
replacement of labour by machines or the closure of a department due to
lack of demand for the products manufactured. Retrenchment, like layoff,
entitles the employees to compensation. But retrenchment differs from
layoff. In layoff, the employee continues to be in the employment of the
organisation and will be recalled after the end of the layoff period. But in
retrenchment, the employee stops being in the employment of the
organisation.
Retrenchment is different from dismissal. Retrenchment is forced on both
the employer and the employees whereas in dismissal, an employee is
dismissed because of the fault of the employee. Also, in retrenchment, the
services of several employees are terminated, and in dismissal, the
services of only few employees are terminated.
Voluntary Retirement Scheme (VRS)
This is another type of separation where surplus labour is reduced by
paying them handsome compensations. Managements prefer to pay hefty
sums and reduce staff strength than retaining surplus labour and
continuing them to pay compensation. Also, VRS is perceived as a painless
and time-saving method of trimming staff strength, as the organisation
offers the compensation only to those employees who opt for VRS. On the
other hand, organisations have lost competent employees while
incompetent employees have not opted for VRS.
Downsizing
Downsizing means reducing the size of workforce. It involves several
employees and is mostly adopted by organisations when they face any of
the below situations:
a. When the organisation is constantly incurring losses over a period of
years.
b. When the organisation goes in for restructuring.
Downsizing should be handled carefully because of its negative impact. It
affects the employee morale as the surviving employees experience loss of
identity, colleagues and security. Also, the economic benefits that an
organisation expects often fail to materialise.
226
SEPARATION
Activity A
What is Separation? Describe the various methods of separation.
…………………………………………………………………………………………..……………………………
…………………………………………………………………………………………..……………………………
…………………………………………………………………………………………..……………………………
11.3 HOW TO MANAGE SEPARATION EFFECTIVELY

The entire separation process should be handled smoothly without the
separating employee feeling harassed or emotionally disturbed. Smooth
transitions and return of company property should be ensured. Valuable
insights about the organisation from departing employee are received
through exit interviews that help the organisation reduce future attrition.
Employee exits are natural part of the employee life cycle. Whether caused
by voluntary resignation, retirement or company induced termination,
employee separations need to be efficiently managed by HR.
Employee separation needs to be handled with sensitivity, discretion and
speed so that exits can happen smoothly and on good terms. After all,
former employees are the most effective brand ambassadors for the
company’s employer brand equity.
Exiting employees present an opportunity to glean a wealth of valuable
feedback and insights on the organisation’s strengths and weaknesses as
an employer, and employee engagement levels in the organisation.
Exit Interview
Exit interviews are conducted just before an employee leaves an
organisation and are conducted to know the reason for quitting and the
circumstances which made the employee quit. The exit interview should
have structured set of questions which can include the following:
• What is your reason for leaving the present job?
• What did you like most about your job?
• What did you like least about your job?
• What did you like most about the organisation?
• What did you like least about the organisation?
227
SEPARATION
• Would you like to join back the organisation in the future?

• What would make this organisation a better place to work?
Exit interviews are very useful as they provide feedback about the
employee’s experiences on the job. The feedback provided by the
separating employee could help the organisation in strengthening its
retention strategies. Also, the interview can help retain a competent
individual who has quit his job.
On the other hand, the separating employee need not be candid and
objective while giving feedback during the exit interview.
11.4 HOW TO MINIMISE LABOUR TURNOVER/REDUCE

ATTRITION
Attrition can be reduced by retaining high performers through innovative
reward schemes while engaging in human resource planning to ensure that
only a few employees occupy difficult-to-replace positions. Some of the
retention strategies followed by organisations are:
Corporate Culture
A Corporate Culture, strong and supportive to its employees with a caring
attitude, matters a lot in retaining people and reducing attrition.
Usually, the culture of an organisation clashes with the climate of the
organisation, resulting in bad relations between management and
employees.
It should be the endeavor of the Top Management to create, nurture and
enhance an employee-enabling climate of working and growth.
Companies with strong Corporate Culture usually do not have much of
issues with attrition.
228
SEPARATION
Succession Planning
Succession planning includes training programmes and series of job
assignments leading to top positions. Succession planning used to refer to
the process of replacing a CEO when the position became vacant due to
foreseen or unforeseen circumstances.
These days, leading organisations understand the importance of
implementing a succession plan for more and more roles across the
company – in some cases extending to the larger population (managerial,
professional, and administration). Nowadays, more organisations are
planning for succession and development because they have found that it
takes years of systematic grooming to produce effective managers.
Succession planning is also an important way to identify, develop, retain
and allocate key members of your workforce long before any talent gap
occurs. Also, top-performing employees are often looking for jobs that are
engaging while their managers are continually looking for ways to motivate
and retain them.
Most succession planning programmes include the involvement and
commitment of the top management, high-level review of the succession
plans, formal assessment of the performance and potential of the
candidates, and written and specific development plans for the individual
candidates.
Succession planning efforts are designed within the context of an
organisation’s overall business plan. Since the strategic plan and corporate
objectives direct the skills and abilities needed by the company’s
leadership, these plans also affect the training and development
implemented by the company. All organisations incorporate a robust
development programme which is a part of the succession planning process
to ensure the right people, with the right skills, are available at the right
time to meet current and future business needs.
229
SEPARATION
Career Development
Career is a progress of a person in some profession or in an organisation.
Career development refers to a formal approach used by an organisation to
ensure that employees with proper qualifications and experiences are
available when needed. Organisations devise and implement several
initiatives in order to develop their employees’ careers. Most significant of
them are career planning, workshops, career counselling, mentoring,
personal development plans and career workbooks.
Career development benefits both employees as well as organisations, as
properly developed employees add value to themselves and to the
organisation. Active career development initiatives by a company are a key
retention tool to keep the best talent within its fold. It is one of the
greatest motivators to keep an employee happy and engaged. From the
employees’ point of view, career development initiatives gives them a clear
focus about their career track, the obstacles that they have to overcome
and the final goal to be reached. This focussed approach works to their
advantage from their everyday work to long-term aspiration.
Implementation of these plans help companies earn credibility amongst
employees and commitment towards building ‘intellectual capital’ which is
the strength of any organisation. The impact of career development/
succession planning programmes can be seen through the productivity
indicator, engagement surveys and reduction in attrition rate.
Activity B
Describe the retention strategies followed by organisations.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
230
SEPARATION
11.5 SUMMARY
Separation occurs when an employee leaves the organisation. It can be
either voluntary or involuntary. Resignation and retirement falls in the
category of voluntary separation whereas discharge, layoff, retrenchment,
voluntary retirement scheme (VRS) and rightsizing are the common
methods of involuntary separation. An organisation manages turnover by
separation through retention strategies. An exit interview is a process to
elicit the views of the exiting employee. Career development and
succession planning are some of the strategies adopted by an organisation
to retain high-performing employees.

1. What is separation? Describe the various methods of separation.
2. How does an organisation manage separation effectively?
3. Explain exit interview.
4. What are the retention strategies adopted by organisations?
1. Separation occurs when an _______ leaves the organisation.

(a) employee (b) haphazard
(c) remote (d) restrictive
2. Separations can be either _________ or involuntary.

(a) funds (b) voluntary
(c) booth (d) drink
3. In voluntary separations, the initiation for separation is taken by the

_________ himself.
(a) business (b) trade
(c) employee (d) export
4. In involuntary separations, the initiation for separation is taken by the

__________.
(a) triangle (b) cultural
(c) climatic (d) employer
231
SEPARATION
5. Turnover can also help infuse greater diversity in the _________.

(a) workforce (b) fiscal
(c) monetary (d) food
6. Costs of _________ include retirement costs and hiring and training

costs of new employees.
(a) private (b) turnover
(c) law (d) factory
7. Retirements occur when employees reach the end of their _________.

(a) trade (b) restrictive
(c) careers (d) business
8. Retirement differs from _________.

(a) hard (b) fast
(c) main (d) resignations
9. Industrial Disputes Act _________.

(a) 1947 (b) 1990
(c) 1997 (d) 1998
10.Basis of the _________ may be either on merit basis or security basis.

(a) good (b) layoff
(c) low (d) fast
Answers:
1. (a), 2. (b), 3. (c), 4. (d), 5. (a), 6. (b), 7. (c), 8. (d), 9. (a), 10. (b)
232
SEPARATION
Related Reading
Handling Employee Resignation

(Courtesy – Vinnie Bhadra, The Times of India – Ascent)
Even the best employer has to face the dilemma of an employee

resigning for various reasons. The employee could be your star
performer or an above average performer; it is always a task to
deal with when an employee chooses to leave.
When an employee resigns, whether or not he/she is amongst the one who
shoulders the responsibilities, it can cause a disruption in the workflow of
the team. There are so many loose ends to tie, and in order not to let the
productivity get affected, the HR has to come up with solutions that will
create as little bumps in the work process as possible.
“When an employee quits, the HR personnel’s sole motive should be to

handle the team that shall be losing the member. Everyone has a set of
responsibilities and that is how the team is able to give the end result. So,
it is vital to handle an employee’s resignation in a sensitive manner,
considering the consequences,” says Ratan Jain, CEO, Glitters Import.
The HR manager can first address the issue of responsibility division

amongst the existing team members. “When an employee quits, the first
task at hand is to divide his/her responsibilities in case, there is no
replacement found till then. As the team cannot stop functioning and the
other members should also not feel burdened with excessive duties, this
has to be handled with utmost care," says Paresh Rawat, Recruiting Head,
Shah Transport and Engineering Company.
Apart from the duties that have to be split, there also remains the task of
hiring someone who will be able to match up to the team’s expectation of
the previous employee. In an organisation, the teams that work together
usually have their own set dynamics which help them perform better. The
dynamics of the team may be a little difficult for the newcomer to handle.
“In such a situation, the HR can smoothen the way in for the new
employee and make sure that the team as well as the new employee are
comfortable with each other. This can be done by conducting an induction
session for the specific team only so that they know each other under
informal circumstances,” adds Jain.
233
SEPARATION
However, the main role is played by the employee who is resigning. In their
notice period, the HR managers can make sure that they are able to tie the
loose ends and make sure that they bring about a positive transition in the
team while leaving and do not demotivate the other members.
The HR personnel can also organise a meeting with the leaving member
and the other team members, so that in case of any grievances, they can
address it and try to work on the issues so as to keep the productivity
levels high. “The team from which the member resigns will be the most
affected. The entire working process undergoes a sudden change and
people who are staying back in the company are the ones to deal with the
change. Some team members will be receptive to the change and some
won’t. That is why it is said that dealing with an employee’s resignation is
not an easy task, and requires a lot of tact and understanding,” concludes
Rawat.
234
SEPARATION
Related Reading
Life after Layoff
(Courtesy – Mousumi Halder Ghosh, The Times of India – Ascent)
As an individual, nothing shakes up your life as much as a sudden

loss of job. So, what can be done in such times of crisis?
‘Layoff’, ‘Downsize’ and ‘Workforce Optimisation’ are no longer terms that

sound strange to the average Indian employee. Although this corporate
phenomenon hitherto has only been associated with the West, Indians are
slowly coming to terms with its harsh reality albeit in a different way!
For an individual, nothing shakes up your life as much as a sudden loss of

job. “One can equate the trauma of being laid off to that of losing a parent
or a limb,” believes Shanth, a bank employee who fears losing his job each
waking hour. Some say that the unfortunate event of being laid off can turn
out to be a golden opportunity in disguise. “It is a chance to stop, catch
your breath and figure out what you want to do with your life,” informs a
popular US-based human resources website. However, in India, only a
handful of the working population is blessed with the financial power to tide
through this unexpected vacation, and devote time and energy in self-
exploration. For a majority, it is the thought of how to get the next pay
cheque and the nightmare of how to pay the next home loan installment
which looms large.
For a laid-off employee, along with the stress of job hunting during tough
times, there is also the added emotional baggage of coming to terms with
the fact that ‘YOU’ have been asked to leave. “Take comfort in the fact that
there are many like you who have been laid off during these typically tough
times and there was nothing personal that made you lose your job,” shares
Madhukar, a back office worker at a publication house who has been given
the pink slip last month and has just started working as a collection agent
for a credit card company.
So, what are the steps that one needs to take to tide through the crisis?
How does one deal with so much in so less time?
235
SEPARATION
First Things First: Tend to Your Finances
“While you are still working, work towards having three to six months’
worth of living expenses in reserve. Draw up a plan to manage your
household expenses and reduce your spending on extraneous luxuries like
eating out or visiting multiplexes. Also, avoid using credit cards since
interest rates on these are really high,” advises Anil Shah, an investment
consultant.
Looking for a New Beginning: Tap Your Contacts
The ideal way to start your job search is to formulate an effective strategy.
Fall back on your network, and let the world know that you are free and
looking for job openings. “Never feel shy to send a communication to all
your friends, peers, former colleagues and relatives telling them about your
situation and you may be surprised with the help you get,” adds Madhukar.
Contact a head-hunter that specialises in your industry and get on the web
to expand your search.
Collect Your Dues
Ensure that you have been paid what you were entitled to. You need to
ensure that you have collected all your dues from yourex-employer. “Sign
and submit all documents in time to ensure that your final settlement
papers clear all that you deserved from the company. If your company is
offering to pay a severance pay, read through the fine print and negotiate if
you have the right to do so,” adds Vipul, an HR executive in an IT company.
And Finally: Stay Calm
Losing a job does not mean you have lost all hope in life! Being patient and
having the right attitude will ensure that you pass these tumultuous times
with ease. Don’t become a loner. Stay surrounded by friends and loved
ones. Be physically fit and do not indulge in booze or smoke. In these
times, it is very ease to fall prey to addictions – steer clear from them.
Even if it takes a few months, you will surely bounce back if you have
courage and have the confidence to do so. Remember – after a spell of
dark rainy days, sun does shine!
236
SEPARATION
If the Worst is Yet to Come…..
When layoff rumours start circulating, it is time to make yourself

indispensable. Here are some tips:
• Meet your supervisors: Let them know what you are working on and
get feedback on how you are doing. The idea is to convey your value to
the organisation.
• Step up your networking: This should happen both inside and outside
your company.
• Update your résumé: Prepare more than one version. That way you
can tailor it to suit the job you are applying for.
237
SEPARATION
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
238
HUMAN RESOURCE INFORMATION SYSTEM
Chapter 12
Human Resource Information System
Objectives
• What is Human Resource Information System (HRIS)?
• The various HR areas benefited by the system
• The process of implementing HRIS in an organisation
• Importance of Human Resource Information System
Structure:
12.1 Human Resource Information System (HRIS)
12.2 Areas of Human Resources benefited by HRIS
12.3 Process of Implementing of HRIS
12.4 Importance of HRIS
12.5 Summary

Rajesh: Sir, I would like to thank you for all the information given
regarding Human Resource Management.
Ajay Verma: You are welcome... But I have left out one small topic.
Rajesh: What’s that, Sir.
Ajay Verma: It is quite an interesting topic and the future of HR in
organisations, from an information point of view. I will tell you about the
Human Resource Information System.
Rajesh: Ok, Sir.
239
12.1 HUMAN RESOURCE INFORMATION SYSTEM (HRIS)

In today's corporate world, human resources has come to play a very
critical role in a business. Whether it concerns the hiring and firing of
employees or whether it concerns employee motivation, the Human
Resource department of any organisation now enjoys a very central role in
not only formulating company policies, but also in streamlining the
business process.
To make a human resource department more effective and efficient, new
technologies are now being introduced on a regular basis to make things
much simpler and more modernised. One of the latest human resource
technologies is the introduction of a Human Resource Information System
(HRIS). This integrated system is designed to help provide information
used in HR decision-making such as administration, payroll, recruiting,
training, and performance analysis.
Human Resource Information System (HRIS) merges human resource
management with information technology to not only simplify the decision-
making process, but also aid in complex negotiations that fall under the
human resource umbrella. The basic advantage of a Human Resource
Information System (HRIS) is to not only computerise employee records
and databases, but to maintain an up-to-date account of the decisions that
have been made or that need to be made as part of a human resource
management plan.
240
12.2 AREAS OF HR BENEFITED BY HRIS

The three principal areas of HR that are benefited by the Human Resource
Information System (HRIS) include:
• Payroll
• Time and labour management
• Employee benefits
These three basic HR functionalities are not only made less problematic,
but they are ensured a smooth running. A Human Resource Information
System (HRIS) thus permits a line manager to see online a chronological
history of an employee from his/her position data, to personal details,
payroll records, and benefits information.
Payroll and HRIS
The advantage of a Human Resource Information System (HRIS) in payroll
is that it automates the entire payroll process by gathering and updating
employee payroll data on a regular basis. It also gathers information such
as employee attendance, calculating various deductions and taxes on
salaries, generating automatic periodic paychecks, and handling employee
tax reports. With updated information, this system makes the job of the
human resource department very easy and simple as everything is
available on a 24 × 7.
Time and Labour Management and HRIS
In time and labour management, a Human Resource Information System
(HRIS) is advantageous because it lets Human Resource personnel apply
new technologies to effectively gather and appraise employee’s time and
work information. It lets an employee’s information be easily tracked so
that it can be assessed on a more scientific level whether an employee is
performing to their full potential or not, and if there are any improvements
that can be made to make an employee feel more secure.
241
Employee Benefits and HRIS

Employee benefits are very crucial because they help to motivate an
employee to work harder. By using a Human Resource Information System
(HRIS) in employee benefits, the Human Resource department is able to
keep better track of which benefits are being availed by which employee
and how each employee is profiting from the benefits provided.
Other Areas of HR Affected by Human Resource Information
System (HRIS)
The other areas of HR that are affected by Human Resource Information
System (HRIS) are:
Training and HRIS
HRIS is very advantageous in tracking the trainings attended by employees
vis-à-vis the training needs of the employees. It tracks the types of
trainings attended, the number of days of the training programme, the
number of people attending a training, etc. This helps the HR in making
better decisions regarding the trainings provided.
Performance Appraisal and HRIS
In some companies, HRIS is used to track the performance of an
employee. The key performance objectives/indicators are entered into the
system at the beginning of the year with the employee and the line
manager signing off the key objectives. At the end of the year, the
performance feedback is conducted face-to-face and the key discussion
points are entered into the system, and the employee and the line
manager has to sign off the performance appraisal in the system. This
helps the HR department to keep track of an employee’s performance over
the years.
Compliance and HRIS
Certain organisations, especially the ones which are more prone to security
risks, have to abide by certain compliance rules. These rules require that
all employees have to undergo certain tests as well as agree to certain
guidelines. For this purpose, HRIS is used. HRIS system is also used to
train employees on compliance issues.
242
Employee Self-service
HRIS allows employees to query HR-related data like payroll and salary
package, leave encashment, etc. It also allows employees to perform some
HR transactions over the system like change in their personal records,
education changes, etc. Employees may query their attendance record
from the system without asking the information from HR personnel. The
system also lets supervisors approve overtime requests from their
subordinates through the system without overloading the task on HR
department.
Types of e-HRM using HRIS
There are three kinds of e-HRM:

1. Operational e-HRM: It is concerned with the operational functions of
HR such as payroll, employee’s personal data, etc.
2. Relational e-HRM: It is concerned with the supporting business
processes, viz., training, recruitment, selection, etc.
3. Transformational e-HRM: It is concerned with the HR strategies and
its activities such as knowledge management, strategic orientation, etc.
Through e-HRM, the main activities that could be performed online are
Recruitment, Selection, Training, Performance Management and
Compensation.
Activity A
What is Human Resource Information System? How is it advantageous to
Human Resource department in an organisation?
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
243
12.3 PROCESS OF IMPLEMENTING OF HRIS

Implementing HRIS is usually perceived as an IT project. They may be
accustomed to pushing responsibility for such projects onto IT managers,
but implementing an integrated HRIS requires HR manager participation
and active involvement in scoping, implementation, cutover, resourcing and
management.
Evaluating and Preparing for a New HRIS
Many companies go through a process of comparing and evaluating several
HRIS packages using a team of analysts or managers from the various
units affected – HR Administration, Payroll, Benefits, Employee Relations,
Training and so on. As this team prepares its evaluation criteria and
reviews HRIS features, much is learned about the goals and values of the
various units. The HR administration unit is looking for improved reporting
of employee data, Payroll is concerned with the system’s paycheck
calculations and regulatory reporting, while Benefits may be looking for a
more streamlined enrollment process. As this team drives deeper into the
selection criteria, the members learn more about each other and may start
to see the emergence of some chaotic business processes.
As the team evaluates an HRIS software package, it begins to get a better
grasp on what the entire company’s business processes are, and therefore,
what the company might require in an HRIS. The team will most likely find
that none of the packages are an exact fit and that substantial effort is
required to modify or integrate the chosen HRIS. If due diligence and
research is not done, the team may face this effort and not be aware of it.
This gap in planning will show itself in the subsequent implementation
phase when the project team realises there are not enough resources –
time, people and money – to implement the HRIS.
Perhaps, the most critical results of the HRIS evaluation process are that
the evaluation team set correct expectations for the project and gain
executive management commitment. With correct, or at least, realistic
expectations and an executive management team that seriously supports
the team’s efforts, an HRIS implementation project has a much greater
chance to succeed.
244
Configuring the New HRIS

An HRIS comes with built-in processes for most HR activities, but firms will
need to customise the system to process according to their specific needs.
For example, every HRIS supports the process of benefits open enrollment,
but the system does not come delivered with a firm’s specific benefit
providers and eligibility rules. Customising the HRIS for this typically does
not involve programming; the common activity is to enter specific data into
control tables that then direct how the HRIS operates. The customising, or
configuration tasks, then become a process of understanding the firm’s
business processes well enough to encode that logic into the HRIS. This
mapping of business processes and policies into system control tables
require people who understand both the business process and the HRIS –
typically the existing IT support and HR business analysts. Due to the large
amount of work, the HRIS project team usually needs these analysts fully
dedicated to the project, requiring the “home” departments to fill the gaps
in their absence. Having partially dedicated team members may cause
tension since the team members have to maintain responsibilities at the
home department while also fulfilling responsibilities of the project team.
Either way, back-filling resources becomes a big issue if not planned for
during the evaluation stage.
Firms may find that the internal resource people assigned to the project do
not have the skills or capabilities needed for the job. Sometimes, training
can resolve this, but other times, the people lack basic analytical skills
required for the implementation. One of the key requirements for a person
to be successful on an HRIS implementation project is that he/she have
excellent analysis skills. The most analytical people in HR and IT should be
assigned to the project, or else the company should rely on external
resources (i.e., contractors or consultants). The project can be get done
this way – but the more an implementation team relies on external
resources, the more difficult it will be for the company to become self-
sufficient in ongoing HRIS support, maintenance and operations.
245
Many HRIS implementations include, to one degree or another, business

process reengineering. As a firm documents, investigates, and discovers its
true business processes, it is natural that the firm also takes time to
improve them, or at least, integrate the processes across departments. The
integrated nature of most HRIS packages drives this activity. When a
process is reengineered or integrated, once-independent departments
become much more dependent on each other. That dependency can
increase tensions on the project team as representatives from those
departments learn to trust others to do their part of the process. Or, once
the project team members become comfortable with the new processes
they have designed, they may have a hard time convincing the other
departments regarding these changes.
Finally, as the project team analysts dig into the current business
processes, they may find that the HR users, and sometimes managers, do
not really understand or know the processes well. Users may know what is
done, but not why it is done. Knowing the why part is critical to getting the
most out of an HRIS implementation. In every HRIS, there are two or three
technical methods of implementing any given requirement – knowing why
something is done in a business process helps ensure the project team
analysts select the best method of implementing it in the HRIS.
Linking the New HRIS with Other Systems
Most HRIS project teams have a number of people assigned to converting
historical data from the existing HR databases into the new HRIS, as well
as for interfacing the new HRIS with other systems that rely on HR data.
As this group starts mapping historical data to the new system for
conversion, most often group members will find (particularly when
combining data from several existing systems to go into one HRIS) that the
existing HR data contains a significant amount of invalid, incomplete, or
contradictory data. As the new HRIS was configured for new, reengineered
or streamlined business processes, the existing employee data may not fit
well into the new system. The new HRIS will demand more complete and
accurate employee data. Making sense of these data conversion problems
is a skill that falls to HR analysts, not the programmers writing data-
conversion routines. Conversion and interfacing are not solely technical
activities – user consultation and input are required. Many HRIS project
teams discover these requirements too late, thus increasing the demand
for time from HR analysts on the project team.
246
If the firm has a data warehouse, the new HRIS data will need to be
mapped to it. If the data model in the warehouse is based on the legacy
HR database, the two data models may not be compatible. A lot of effort
can be spent mapping the new HRIS to an existing data warehouse. Or if
the HRIS vendor has its own data warehouse application, the project team
might be tempted to use it, but they will still have to contend with
converting existing historical HR data into the new warehouse. Either way,
HRIS project teams spend more effort than planned on this issue – the
details can get very tedious and time-consuming.
Replacing HR systems involves any area of the company that reads or
relies on employee data. New system implementation may highlight
employee data privacy issues, or increase the scope of interfacing once the
project team realises just how many systems read employee data from the
current HR-related databases.
Preparing the Organisation
The HRIS project team must track progress not only on the technical
aspects of implementing the HRIS, but also on the softer side of managing
the organisation as a whole to accept the new business processes that
come with the HRIS. Companies typically underestimate this change-
management effort. From the very beginning, there must be a focus on
preparing the organisation and the employees for the new HRIS.
A new HRIS, with more integrated work processes, tends to pull related
departments together. Some firms recognise this as they go through the
implementation process, and also implement a new organisational
structure with the HRIS roll-out. For example, HR and Payroll may have
reported to separate areas of the company, and parts of HR business
processes were scattered throughout various departments. But as a new
HRIS is implemented, the previous organisations are transformed to report
to a single authority, and a shared-services group is established to perform
the integrated work processes that were once scattered. This is a common,
but often, unexpected result of HRIS implementations.
During the implementation phase, the firms should also determine what
their support model will look like – what kind of organisation will be
required to support this new HRIS? Those who study this task in detail will
realise they need cross-functional support teams – containing
programmers, configuration experts, and business analysts – to
successfully support the new HRIS. But this integrated support team does
not fit well into the vertical departments in most companies today. Finding
247
a way to implement this cross-functional team is a critical success factor

for the new HRIS’s ongoing operation.
Activity B
Describe the process of implementing an HRIS in an organisation.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
12.4 IMPORTANCE OF HRIS

HRIS Benefits
HRIS has showed many benefits to the HR operations. A few of them can
be detailed as:
(a) Faster information process,
(b) Greater information accuracy, and
(c) Improved planning and programme development.
Enhanced Employee Communications
Putting HR services online does not just cut costs by letting employees
research their own inquiries or by letting HR call center counsellors do their
jobs more easily (although it certainly does both). It also enables HR to
redeploy its assets and focus on more strategic issues.
HRIS is useful in measuring the diversity of the organisation. The HR
manager depends on the HRIS to assess the efficiency and effectiveness of
a company’s diversity. HRIS provides accurate information thus reducing
the costs of collecting and compiling the relevant information. It helps the
HR manager to know the turnover in the organisation, the percentage of
minority/women promotions, workforce profile and the cost of replacement
per hire.
HRIS also improves the administrative efficiency by speeding up the
provision of data, by reducing the resources required to carry out routine
administration, thereby freeing the resources for higher-value activities
which are fundamental to the success of the management. It helps in
supporting the decisions of the management as it gives a factual basis for
decisions concerning the planning, acquisition, development, utilisation and
remuneration of human resources.
248
Critical Analysis
Although almost all HR managers understand the importance of HRIS, the
general perception is that the organisation can do without its
implementation. Hence, only large companies have started using HRIS to
complement its HR activities.
But HRIS would be very critical for organisations in the near future. This is
because of a number of reasons:
(a) Large amount of data and information to be processed.
(b) Project-based work environment.
(c) Employee empowerment.
(d) Increase in knowledge workers’ and associated information.
(e) Learning organisation.
The primary reason for delay in HRIS implementation in organisations is
because of the fear psychosis created by “technology” and “IT” in the
minds of senior management.
They may not be very tech-savvy and fear being left out.
But trends are changing for the better as more and more organisations
realise the importance of IT and technology. Major HRIS providers are
concentrating on the small- and middle-range organisations as well as
large organisations for their products. They are also coming up with very
specific software modules, which would cater to any of their HR needs. SAP
and PeopleSoft provide HR modules within their business intelligence
software. Hence, HRIS would soon be an integral part of HR activities in all
organisations.
249
12.5 SUMMARY
Human Resource Information System refers to the systems and processes
at the intersection between human resource management (HRM) and
information technology. It has impacted many key Human Resource
Department’s activities like payroll, time and labour management, and
employee benefits. Many organisations have adopted it to streamline the
HR processes and also to lessen the burden on the HR department.

1. What is Human Resource Information System? Describe its impact on
HR activities.
2. Explain the process involved in implementing Human Resource
Information System.
3. What is the importance of HRIS in an organisation?
1. HRIS means __________.

(a) Human Regions Information Season
(b) Human Resources Innovation Season
(c) Human Resource Information System
(d) Human Regions Investment System
2. Employee __________ are very crucial because they help to motivate

an employee to work harder.
(a) funds
(b) good
(c) main
(d) benefits
3. In some companies, HRIS is used to track the __________ of an

employee.
(a) performance
(b) home
(c) two
(d) wicket
250
4. HRIS system is also used to train employees on __________ issues.

(a) cultural
(b) compliance
(c) export
(d) monetary
5. Implementing HRIS is usually perceived as an __________ project.

(a) IO
(b) OT
(c) IT
(d) OI
6. Many HRIS __________ include, to one degree or another, business

process reengineering.
(a) implementations
(b) good
(c) bad
(d) soft
7. If a firm has a data warehouse, the new HRIS data will need to be
__________ to it.
(a) termination
(b) mapped
(c) cream
(d) fun
8. A new HRIS, with more __________ work processes, tends to pull

related departments together.
(a) gain
(b) water
(c) integrated
(d) pain
9. HRIS is useful in measuring the __________ of the organisation.

(a) frauds
(b) rain
(c) square
(d) diversity
251
10. HRIS would be very critical for __________ in the near future.
(a) organisations
(b) energies
(c) immigrants
(d) environment
Answers:
1. (c), 2. (d), 3. (a), 4. (b), 5. (c), 6. (a), 7. (b), 8. (c), 9. (d),

10. (a).
252
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
253
WORK LIFE: QUALITY AND RELATED ISSUES
Chapter 13
Work Life: Quality And Related Issues
Objectives

• Concept of Quality of Work Life (QWL)
• Issues in QWL
• Causes of Workplace Violence and measures to minimise it
• Sexual Harassment and its effects in the workplace
• Alcoholism and Drug Abuse and techniques to deal them
Structure:
13.1 Issues in QWL
13.2 Workplace Violence
13.3 Sexual Harassment
13.4 Alcoholism and Drug Abuse
13.5 Summary
254
The present era is an era of knowledge workers and the society in which
we are living has come to be known as knowledge society. The intellectual
pursuits have taken precedence over the physical efforts.
Some knowledge workers work for more than 60 hours a week. As a result
of this, their personal hobbies and interests clash with their work. Life is a
bundle that contains all the strands together, and hence the need to
balance work life with other related issues.
One must have both love and work in one’s life to make it healthy. Gone
are the days when the priority of employees used to be for physical and
material needs. With the increasing shift of the economy towards
knowledge economy, the meaning and quality of work life has undergone a
drastic change.
Meaning
Qual i ty of Work Li fe (QWL) refers to the favourabl eness or
unfavourableness of a job environment for the people working in an
organisation. The period of scientific management, which focused solely on
specialisation and efficiency, has undergone a revolutionary change.
The traditional management (like scientific management) gave inadequate
attention to human values. In the present scenario, needs and aspirations
of the employees are changing. Employers are now redesigning jobs for
better QWL.
Definition
The QWL as strategy of Human Resource Management has assumed
increasing interest and importance. Many other terms have come to be
used interchangeably with QWL such as ‘humanisations of work’, ‘quality of
working life’, ‘industrial democracy’ and ‘participative work’.
255
There are divergent views as to the exact meaning of QWL.

A few definitions given by eminent authors on QWL are given below:
1. “QWL is a process of work organisations which enable its members at all
levels to actively participate in shaping the organisation’s environment,
methods and outcomes. This value-based process is aimed towards
meeting the twin goals of enhanced effectiveness of organisations and
improved quality of life at work for employees.” – The American Society
of Training and Development
2. “QWL is a way of thinking about people, work and organisations. Its
distinctive elements are: (i) a concern about the impact of work on
people as well as on organisational effectiveness, and (ii) the idea of
participation in organisational problem-solving and decision-making.” –
Nadler and Lawler
3. “The overriding purpose of QWL is to change the climate at work so that
the human-technological-organisational interface leads to a better
quality of work life.” – Luthans
4. “QWL is based on a general approach and an organisation approach.
The general approach includes all those factors affecting the physical,
social, economic, psychological and cultural well-being of workers, while
the organisational approach refers to the redesign and operation of
organisations in accordance with the value of democratic society. ”
From the definitions given above, it can be concluded that QWL is
concerned with taking care of the higher-order needs of employees in
addition to their basic needs. The overall climate of workplace is adjusted
in such a way that it produces more humanised jobs.
QWL is viewed as that umbrella under which employees feel fully satisfied
with the working environment and extend their wholehearted co operation
and support to the management to improve productivity and work
environment.
256
-
13.1 ISSUES IN QWL

Trade unions claim that they are responsible for the improvement in
various facilities to workers whereas management takes credit for
improved salaries, benefits and facilities. However, P/HR Manager has
(identified) specific issues in QWL besides normal wages, salaries, fringe
benefits, etc. and take lead in providing them so as to maintain higher
order QWL. Major QWL issues are:
1. Pay and stability of employment: Good pay still dominates most of
the other factors in employee satisfaction. Various alternative means for
providing wages should be developed in view of increase in cost of living
index, and increase in levels and rates of income tax and profession tax.
Stability, to a greater extent, can be provided by enhancing the facilities
for human resource development.
2. Occupational stress: Stress is a condition of strain on one’s emotions,
thought process and physical condition. Stress is determined by the
nature of work, working conditions, working hours, pause in the work
schedule, worker abilities, and nature and match with the job
requirements. Stress is caused due to irritability, hyper-excitation or
depression, unstable behaviour, fatigue, stuttering, trembling,
psychosomatic pains, heavy smoking and drug abuse. Stress adversely
affects employees’ productivity. The P/HR Manager, in order to minimise
the stress, has to identify, prevent and tackle the problem. He may
arrange the treatment of the problem with the health unit of the
company.
3. Alternative work schedules: Alternative work schedules including
work at home, flexible working hours, staggered hours, reduced work
week and part-time employment may be introduced for the convenience
and comfort of the workers as the work schedule which offers the
individual the leisure time, flexible hours of work is preferred.
4. Recognition: Recognising the employee as a human being rather than
as a labourer increases the QWL. Participative management, awarding
the rewarding system, congratulating the employees for their
achievement, job enrichment, offering prestigious designations to the
jobs, providing furnished and decent workplaces, offering memberships
to clubs or association, providing vehicles, and offering vacation trips
are some of the means to recognise the employees.
257
5. Congenial worker-supervisor relation: Harmonious supervisor-

worker relations give the worker a sense of social association,
belongingness, achievement of work results, etc. This in turn leads to
better QWL.
6. Adequacy of resources: Resources should match with stated
objectives. Otherwise, employees will not be able to attain the
objectives. This results in employee dissatisfaction and lower QWL.
7. Seniority and merit in promotions: Seniority is generally taken as
the basis for promotion in case of operating employees. Merit is
considered as the basis for advancement for managerial people whereas
seniority cum-merit is preferred for promotion of ministerial employees.
The promotional policies and activities should be fair and just in order to
ensure higher QWL.
13.2 WORKPLACE VIOLENCE

Workplace violence is violence or the threat of violence against workers. It
can occur at or outside the workplace, and can range from threats and
verbal abuse to physical assaults and homicide, one of the leading causes
of job-related deaths. However, it manifests itself, workplace violence is a
growing concern for employers and employees nationwide.
What are the Causes of Workplace Violence?
Workplace violence takes many forms and has many causes. Angered
former employees, customers who feel wronged, stressed out employees
or a conflict between co-workers can elevate to the point of a violent
altercation in the office. Personal life does spill over into the workplace, and
sometimes those personal issues present themselves at the office with
dangerous consequences. Companies that recognise the potential for
workplace violence are in the best position to prevent it.
• Lack of Pre-employment Screening: Companies that do not conduct
thorough background screenings on potential employees run the risk of
hiring someone who could be prone to violence, or has a violent past.
Although many companies are using psychological tests during the hiring
process in an attempt to weed out the potentially violent candidates, the
test is not full-proof and should not be substituted for a thorough
background check.
258
• Stress: As much as companies attempt to dictate this, employees do not

leave their personal issues at the door. Stress, of a workplace and
personal nature, can cause an employee to snap and lash out at
whomever the perceived enemy is. Overworking employees can create a
hostile work environment, and if the employee is also battling personal
issues, the combination can have disastrous, if not deadly, results.
• Lack of Employee Assistance Programme: An Employee Assistance
Programme (EAP) can diffuse a situation with a potentially violent
employee before the employee has a chance to act. Most employees
become violent as a last resort –they feel no one is addressing or
acknowledging their needs. With an EAP programme in place, employees
have an impartial party with whom they can discuss the stressors in their
life and possibly receive the assistance or treatment they need before
things escalate into violence.
• Denial: Companies who take the approach that nothing bad, such as a
disgruntled employee returning to do harm to his former boss, actually
fuel the workplace violence fire. Ignorance of the potential for violence in
an organisation will cause an organisation not to put proper safety and
conflict resolution measures into place, leaving the organisation
vulnerable to such an attack from employees and customers, and lacking
the tools to diffuse the situation.
• Disgruntled Customers and Former Employees: A person who feels
a company has wronged him in some way can lash out at the company.
It could be a customer who feels he was cheated, or it could be an
employee who was fired, laid off or wronged by.
Consequences of Workplace Violence

Violence at the workplace leads to the following consequences:
• Major: Physical attacks, assaults, psychological trauma, anger-related
accidents, rape, arson and murder.
• Minor: Violent arguments, verbal batting, violations in the ethics and
rules, sabotage, property damage, vandalism, etc.
259
Measures to Minimise the Workplace Violence

Management should take the following steps to reduce the violence:
• Counselling the more powerful employees;
• Divert the powerful employees towards organisational goals, or to the
issues where their power can be used constructively;
• Create a more friendly environment at the workplace;
• Formulate the teams with all kinds of employees;
• Eliminate candidates with violence behaviour at the time of selection;
and
• Impose severe punishments on violators.
13.3 SEXUAL HARASSMENT

Sexual Harassment and Human Resources
One of the most difficult areas for Human Resource (HR) departments is
developing and managing policies and handling allegations on sexual
harassment. Sexual harassment occurs when one employee makes
continued, unwelcome sexual advances, requests for sexual favours, and
other verbal or physical conduct of a sexual nature, to another employee,
against his or her wishes.
Many employers are not aware of sexual harassment activities occurring in
their workplace, and often times, they are surprised when they learn what
even constitutes sexual harassment. Sexual harassment can occur in many
situations such as the examples listed below. The list is not to be
considered all-inclusive and is shown only to provide examples:
• Posting e-mails or pictures of a sexually related nature.
• Repeated requests for dates that are turned down.
• Unwanted flirting.
• Any body contact such as grabbing an employee around the waist,
patting a co-worker’s back, or interfering with an employee’s ability to
get around the workplace.
• Playing sexually suggestive music.
• Unwanted jokes, gestures and offensive words on clothing.
260
The Effects of Sexual Harassment in the Workplace

The serious effects of sexual harassment are often understated. These
behaviours can cause significant health problems, financial difficulties, and
even global repercussions.
Emotional Well-being
Sexual harassment can jeopardise the victim’s emotional and mental
health. It can lead to the loss of self-esteem and it may even compromise
personal relationships. Sexual harassment in the workplace can cause
significant stress and anxiety. An employment harassment lawyer is also
likely to work with clients who have suffered from long-term clinical
depression as a result of sexual harassment.
Physical Health
Physical health and emotional health are closely linked. When victims of
sexual harassment experience mental and emotional problems, it often
leads to physical health issues such as loss of appetite, headaches, weight
fluctuations and sleep disturbances. Sleep disturbances can in turn lead to
other serious health problems such as hormonal imbalance, an increased
risk of high blood pressure and a weakened immune system.
Financial Challenges
In addition to causing health problems, sexual harassment frequently leads
to financial challenges such as lost wages and unpaid leaves. Some victims
of sexual harassment may even face broader career repercussions, such as
the loss of job references. They may decide to leave their current position
or employer to avoid a hostile work environment.
Global Consequences
Sexual harassment has a direct effect on employers and the global
economy. Each year, millions are lost due to absenteeism, low productivity,
employee turnover, low morale, and legal costs stemming from sexual
harassment. The economy also suffers due to premature retirement and
higher insurance costs.
261
Measures of Reduce Sexual Harassment

Below are some measures that employers can take in order to create a
harassment-free workplace:
• Make it clear that this is a workplace where harassment will not be
tolerated.
• Provide education and information about harassment to all staff on a
regular basis.
• The circulation of information, open communication and guidance is of
particular importance in removing the taboo of silence which often
surrounds cases of sexual harassment. Information sessions, personnel
meetings, office meetings, group discussion and problem-solving groups
can prove very effective in this respect. Staff should also be informed of
the best way of coping with aggression by means of guidelines and staff
development programmes on sexual harassment at work.
• Develop an anti-harassment policy together with employees, managers
and union representatives.
• Communicate the policy to all employees.
• Make sure that all managers and supervisors understand their
responsibility to provide a harassment-free work environment.
• Ensure that all employees understand the policies and procedures for
dealing with harassment – new and long-term employees alike – this
involves training, information and education.
• Show you mean it – make sure that the policy applies to everyone,
including managers and supervisors.
• Promptly investigate and deal with all complaints of harassment.
• Appropriately discipline employees who harass other employees.
• Provide protection and support for the employees who feel they are being
harassed.
• Take action to eliminate discriminatory jokes, posters, graffiti, e-mails
and photos at the work site.
• Monitor and revise the policy and education/information programmes on
a regular basis to ensure that it is still effective for your workplace.
262
• Employers should provide a mechanism for addressing sexual

harassment in a confidential and sensitive manner after a grievance has
been filed.
• A well-constructed and well-implemented plan within an organisation
may stop inappropriate conduct before it creates a problem for individual
employees or the company.
13.4 ALCOHOLISM AND DRUG ABUSE

Alcohol and drug use among employees can be an expensive problem for
business and industry, with issues ranging from lost productivity,
absenteeism, injuries, fatalities, theft and low employee morale, to an
increase in health care, legal liabilities and workers’ compensation costs.
The impact of alcoholism and drug dependence in the workplace often
focuses on four major issues:
1. Premature death/fatal accidents
2. Injuries/accident rates
3. Absenteeism/extra sick leave
4. Loss of production
Additional Problem Areas
Additional problem areas can include:
• Tardiness/sleeping on the job
• After-effects of substance use (hangover, withdrawal, etc.) affecting job
performance
• Poor decision-making
• Loss of efficiency
• Theft
• Lower morale of co-workers
• Increased likelihood of having trouble with co-workers/ supervisors or
tasks
• Pre-occupation with obtaining and using substances while at work,
interfering with attention and concentration
263
• Illegal activities at work including selling illicit drugs to other employees

• Higher turnover
• Training of new employees
• Disciplinary procedures
Techniques to Deal with Alcoholism and Drug Abuse

Techniques to deal with this problem include:
• Administering the tests to detect alcoholism and drug abuse along with
employment tests and weed out candidates indulging in such cases;
• Conducting counselling programmes;
• Providing training;
• Taking disciplinary action; and
• Controlling the employees financially by paying the salary to employee’s
family members.
264
13.5 SUMMARY
Qual i ty of Work Li fe (QWL) refers to the favourabl eness or
unfavourableness of a job environment for the people working in an
organisation. The major issues concerning QWL are pay and stability of
employment, occupational stress, alternative work schedules, recognition,
congenial worker supervisor relation, adequacy of resources and seniority
and merit in promotions. Workplace violence takes many forms and has
many causes such as lack of pre-employment screening, stress, lack of
employee assistance programme, denial, disgruntled customers and former
employees. Sexual harassment can cause significant health problems,
financial difficulties, and even global repercussions. Employers must take
some measures to create a harassment-free workplace. Alcohol and drug
use among employees can be an expensive problem for business and
industry. Its major issues are premature death/fatal accidents, injuries/
accident rates, absenteeism/extra sick leave and loss of production.
Employers can deal with this problem by using appropriate techniques.

1. What do you mean by Quality of Work Life (QWL)? What are the major
issues of QWL?
2. What is workplace violence? What are the causes of workplace violence?
3. What are the effects of the Workplace Violence? What measures can be
taken to minimise the workplace violence?
4. Describe the effects of sexual harassment in the workplace and also the
measures to reduce it.
5. What are the major issues faced in the workplace due to alcoholism and
drug dependence? What are the techniques used to deal them?
265
1. QWL means _________.

(a) Quality of Wood Life
(b) Quality of Wisdom Life
(c) Quality of Wrong Life
(d) Quality of Work Life
2. Good _________ still dominates most of the other factors in employee

satisfaction.
(a) pay
(b) food
(c) petrol
(d) machinery
3. Stability, to a greater extent, can be provided by enhancing the

_________ for human resource development.
(a) public
(b) facilities
(c) military
(d) community
4. Recognising the _________ as a human being rather than as a labourer

increases the QWL.
(a) claim
(b) childhood
(c) employee
(d) ownership
5. The promotional policies and activities should be fair and just in order to
ensure _________ QWL.
(a) dealer
(b) supplier
(c) beggar
(d) higher
266
6. The QWL as _________ of Human Resource Management has assumed

increasing interest and importance.
(a) strategy
(b) ancient
(c) grade
(d) demand
7. Seniority is generally taken as the basis for promotion in case of

_________ employees.
(a) downfall
(b) operating
(c) demand
(d) supply
8. Merit is considered as the basis for advancement for _________

people.
(a) separate
(b) singular
(c) managerial
(d) reduce
9. Seniority-cum-merit is preferred for promotion of _________

employees.
(a) child
(b) old
(c) bad
(d) ministerial
10. Employers are now redesigning _________ for better QWL.

(a) jobs
(b) associations
(c) market
(d) beggars
Answers:
1. (d), 2. (a), 3. (b), 4. (c), 5. (d), 6. (a), 7. (b), 8. (c), 9. (d), 10. (a).
267
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
268
TOTAL QUALITY AND HUMAN RESOURCE MANAGEMENT
Chapter 14
Total Quality And Human Resource
Management
Objectives
• Concept and principles of TQM
• Significance of human resource management in TQM
• Formulation and execution of total quality and human resource strategies
Structure:
14.1 Meaning and Definition
14.2 Human Resource Development and TQM
14.3 The Total Quality Human Resource Strategy
14.4 Summary
269
14.1 MEANING AND DEFINITION

Total Quality is defined as “.... a people-focused management system that
aims at continual increase in customer satisfaction at continually lower
cost. Total Quality (TQ) is a total system approach (not a separate area or
programme), and an integral part of high level strategy. It works
horizontally across functions and departments, involving all employees, top
to bottom, and extends backward and forward to include the supply chain
and customer chain.”
Total Quality Management (TQM) is a continuous process of improvement
for individuals, groups of people and the total organisation. Unlike other
methods, TQM is the concentrated focus on continuous improvement. TQM
is about changing the way things are done within the organisation’s
lifetime. People must know what to do, how to do it, have the right
methods to do it, and be able to measure the improvement of the process
and the current level of achievement in order to improve the process.
Principles of TQM
1. Be customer-focused: Whatever you do for quality improvement,
remember that only customers determine the level of quality. Whatever
you do to foster quality improvement, training employees and
integrating quality into processes management, only customers
determine whether your efforts were worthwhile.
2. Insure total employee involvement: You must remove fear from
workplace, then empower employee... you provide the proper
environment.
3. Process-centered: Fundamental part of TQM is to focus on process
thinking.
4. Integrated system: All employees must know the business mission
and vision. An integrated business system may be modelled
by MBNQA or ISO 9000.
5. Strategic and systematic approach: Strategic plan must integrate
quality as core component.
270
Fig. 14.1
6. Continual improvement: Using analytical, quality tools, and creative

thinking to become more efficient and effective.
7. Fact-based decision-making: Decision-making must be only on data,
not personal or situational thinking.
8. Communication: Communication strategy, method and timeline must
be well-defined.
271
14.2 HUMAN RESOURCE DEVELOPMENT AND TQM

Human resources play a vital role in total quality management. The
following forces shape the human resource management towards TQM:
1. Economic liberalisations announced by the Government of India in 1991.
2. Opening the Indian economy to the rest of the globe through the
globalisation policy.
3. Entrusting more priority for the private sector to play a constructive role
in the restructuring and development process of Indian economy.
4. Mounting competition among the industries across the globe.
5. Successful companies accord high priority to productively and
systematically understanding and responding to current and future
external customer needs.
6. Successful organisations proactively and systematically understand and
respond to current and future external customer needs.
7. Human resource diversity and mobility are creating new employee
needs and expectations about the future work culture.
8. The information technology revolution is reshaping the core
competencies needed in a knowledge economy.
9. Organisational and human resource leaders are being challenged to
become effective strategic partners in the creation of world-class work
cultures.
The TQM approach brought changes in the attitudes and expectations of
the managers about the roles of human resource managers. Further, the
expectations of stakeholders about the HRM profession have also been
changing. Traditionally, objectives of the business organisations were
restricted to productivity and profits. Consequently, stakeholders,
particularly the customers and employees, were given low priority.
Workers’ participation in management programmes is limited to offering
suggestions by employees. Training and development programmes were
limited to job-related activities rather than extending to employee
capacities.
272
But the business objectives and total quality HRM approach are to
maximise customer satisfaction and market share through improved
quality.
14.3 THE TOTAL QUALITY HUMAN RESOURCE STRATEGY

Traditionally, human resource plans were not integrated with the strategic
plans. But in the total quality organisations, human resource plans should
be integrated with the strategic plans. In fact, HR strategies are given top
priority in total quality organisations. However, HR managers feel that HR
strategies are not yet given due importance even in total quality
organisations.
The human resource role can be of four types, viz., (i) strategic — high
profile, i.e., change agent, (ii) strategic — low profile, hidden persuader,
(iii) operation — high profile, i.e., internal contractor and (iv) operation —
low profile, i.e., facilitator. There are several strategies of human resources
related to profile total quality human resource grand strategies.
Total quality human resource strategic management is also reciprocally
interdependent with business strategic management. This is the most
important contribution to the total quality orientation of human resources.
Total quality human resource approach requires organisation around
process (instead of tasks), flatten hierarchies, use teams to manage
everything, let customer satisfaction drive output, reward team results,
maximise supplier and customer contact, and inform and train all
employees.
Total quality HR strategy managers must shape, introduce, maintain and
review the total quality initiatives.
273
The TQ human resource managers actively involve themselves in the

following activities in order to shape the TQM:
1. Preparing and synthesising reports from other organisations that have
experience in TQM, in conjunction with the management team.
2. Assisting with choices about which TQM approach to adopt.
3. Identifying any internal sources of expertise.
4. Utilising the expertise of practitioners from other organisations.
5. Ensuring that an appropriate infrastructure for TQM is put into place and
takes sufficient account of both customer feedback and human resource
management issues.
6. Reviewing current practices, behaviour and attitudes in the organisation
and assessing their degree of fit with TQM.
7. Shaping the type of organisational structure, culture and ethical climate
appropriate for introducing and sustaining TQM.
8. Designing and delivering senior management development courses that
set the proper tone for TQM.
9. Developing a TQM directory of internal resources and expertise.
274
Total quality HR strategy managers facilitate the introduction and adoption

of TQM by being actively involved in the following activities:
1. Encouraging and facilitating a total quality partnership between the
company and union leadership in order to establish collaboration to
benefit all stockholders.
2. Training all formal leaders (including union officers) in the principles of
TQM, advising them of the best means of developing a process of
continuous improvement within their areas of influence, encouraging
them to persuade everyone to take personal responsibility for their own
quality assurance and being prepared to seek improvements.
3. Identifying the conditions necessary for the successful use of quality
management tools and techniques.
4. Providing guidance on what is necessary for the successful employment
of teams that focus on quality improvement and how they fit into the
organisational structure.
5. Training and coaching facilitators, mentors, and team members in
interpersonal skills and how to manage the improvement process.
6. Designing communication events and vehicles to publicise the launch of
TQM and early successes.
7. Consulting with employees about the introduction and development of
TQM.
8. Institutionalising organisational ethics development programmes.
9. Proactively contributing to vision and mission statements and preparing
quality objectives for dissemination to staff, customers and suppliers.
275
Next, total quality HR strategy managers maintain and reinforce TQM

within the organisation by being actively involved in the following activities:
1. Adopting selection processes that target and screen for conceptual,
technical, ethical, and social skills that support a TQM environment.
2. Introducing or upgrading the quality awareness and TQM component
within orientation courses.
3. Identifying the most appropriate mechanisms for recognising and
rewarding achievements, in particular looking at non-traditional reward
systems.
4. Ensuring that training in quality management tools, techniques and
processes continues to be provided within the organisation and that the
knowledge imparted in such training is being used in the workplace.
5. Redesigning appraisal procedures so that they contain criteria relating to
specific TQM objectives, appropriate social relations, skills and support
personal responsibility, self-assessment, and 360-degree performance
feedback.
6. Preparing and overseeing special newsletters or team briefs on TQM and
improvement initiatives, and the outcome of quality improvement team
projects.
7. Assisting continuous improvement and project teams to work effectively
and innovate.
276
Finally, the total quality HR strategy managers review TQM implementation

progress by being actively involved in the following activities:
1. Contributing to or leading the preparation of an annual TQM report.
2. Assessing the effectiveness of the TQM infrastructure, including steering
committees, quality councils, quality improvement teams, improvement
facilitators, project teams, and individual performance.
3. Preparing and administering employee attitude and ethical climate
surveys and disseminating their results.
4. Co-ordinating customer comments on the organisation’s progress.
5. Benchmarking the effectiveness of the organisation’s TQM with that of
competitors and global best practices.
6. Facilitating the operation of internal reviews using criteria such as ISO
9000, the Malcolm Baldrige National Quality Award or the Deming Prize.
ISO certification enables to enter global markets.
7. Identifying the barriers to continuous quality improvement.
8. Conducting HR, quality and ethics audits.
277
Total quality HR strategic management would not be complete if HR

practitioners do not review their own activities as they do all other areas.
Some of the more typical self-review total quality activities include:
1. Undertaking a department mission analysis of the functional
contribution of human resources to the organisation. This could include
the following:
a. Identifying internal customers and suppliers.
b. Agreeing to performance measures as part of service-level
agreements.
c. Tracking such measurements.
d. Identifying non-value-added activities.
e. Taking part in cross-functional project teams to resolve interface
problems with customers and suppliers.
2. Selecting new HR employees only with peer and customer involvement.
3. Appraising and rewarding HR staff for teamwork, ethical integrity and
customer satisfaction.
4. Training and developing HR employees on a regular basis.
5. Surveying and distributing the results of HR staff satisfaction and ethical
climate surveys.
6. Providing advice on ethical problem analysis and conflict resolution
within a specified and agreed-upon time period.
7. Benchmarking HR policies and processes with world-class models.
278
14.4 SUMMARY
Total Quality Management (TQM) is a continuous process of improvement
for individuals, groups of people and the total organisation. Human
resources play a vital role in total quality management. In the total quality
organisations, human resource plans should be integrated with the
strategic plans. Total quality human resource strategic management is also
reciprocally interdependent with business strategic management. This is
the most important contribution to the total quality orientation of human
resources.Total quality HR strategy managers must shape, introduce,
maintain and review the total quality initiatives.

1. Discuss the terms ‘Total Quality’ and ‘Total Quality Management’.
2. Explain the principles and core concepts of TQM.
3. Explain the significance of human resource management in TQM.
4. How do you formulate and execute total quality and human resource
strategies?
279
1. TQM means ________.

(a) Total Quantity Management
(b) Total Quality Management
(c) Total Quantity Minister
(d) Total Quality Minister
2. TQM is the ________ focus on continuous improvement.

(a) residential
(b) market
(c) concentrated
(d) public
3. TQM is about changing the ways things are done within the
organisation’s ________.
(a) goods
(b) emergency
(c) depression
(d) lifetime
4. Fundamental part of TQM is to focus on ________ thinking.

(a) process
(b) market
(c) community
(d) public
5. All ________ must know the business mission and vision.

(a) jug
(b) compensation
(c) funds
(d) price
6. Strategic plan must integrate ________ as core component.

(a) private
(b) poor
(c) quality
(d) cultural
280
7. Communication ________, method and timeline must be well-defined.

(a) private
(b) community
(c) rich
(d) strategy
8. Traditionally, human resource plans were not ________ with strategic

plans.
(a) integrated
(b) trade
(c) fade
(d) fate
9. Total quality human resource strategic management is also reciprocally

________ with business strategic management.
(a) money
(b) interdependent
(c) moving
(d) buying
10.Total Quality Management is a continuous process of improvement for

individuals, groups of people and the total ________.
(a) stress
(b) life
(c) organisation
(d) fun
Answers:
1. (b), 2. (c), 3. (d), 4. (a), 5. (b), 6. (c), 7. (d), 8. (a), 9. (b), 10. (c).
281
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
282
ETHICS IN HUMAN RESOURCE MANAGEMENT
Chapter 15
Ethics In Human Resource Management
Objectives
• Ethical issues in HRM
• Managing Ethics
• Benefits of and guidelines for managing ethics in the workplace
• Key roles and responsibilities in Ethics Management
• Tools of Ethics
Structure:
15.1 Ethical Issues in HRM
15.2 Managing Ethics
15.3 Benefits of Managing Ethics in the Workplace
15.4 Ethics in HRM – Global Context
15.5 Guidelines for Managing Ethics in the Workplace
15.6 Key Roles and Responsibilities in Ethics Management
15.7 Ethics Tools: Codes of Ethics
15.8 Ethics Tools: Codes of Conduct
15.9 Ethics Tools: Policies and Procedures
15.10 Ethics Tools: Training
15.11 Summary
283
15.1 ETHICAL ISSUES IN HRM
HR Ethical issues arise in employment, remuneration and benefits,

industrial relations, and health and safety.
Cash and Compensation Plans

There are ethical issues pertaining to the salaries, executive perquisites,
the annual incentive plans, etc. The HR manager is often under pressure to
raise the band of base salaries. There is increased pressure upon the HR
function to pay out more incentives to the top management and the
justification for the same is put as the need to retain the latter. Further,
ethical issues crop in HR when long-term compensation and incentive plans
are designed in consultation with the CEO or an external consultant. While
deciding upon the payout, there is pressure on favouring the interests of
the top management in comparison to that of other employees and
stakeholders.
Diagrammatic Representation of HR Ethical Issues
284
Race, Gender and Disability

In many organisations till recently, the employees were differentiated on
the basis of their race, gender, origin and their disability. Not anymore ever
since the evolution of laws and a regulatory framework that has
standardised employee behaviours towards each other. In good
organisations, the only differentiating factor is performance. In addition,
the power of filing litigation has put organisations on the back foot.
Managers are trained for aligning behaviour and avoiding discriminatory
practices.
Employment Issues
Human resource practitioners face bigger dilemmas in employee hiring.
One dilemma stems from the pressure of hiring someone who has been
recommended by a friend, someone from your family or a top executive.
Yet another dilemma arises when you have already hired someone and he/
she is later found to have presented fake documents. Two cases may arise
and both are critical. In the first case, the person has been trained and the
position is critical. In the second case, the person has been highly
appreciated for his work during his short stint or he/she has an unique
blend of skills with the right kind of attitude. Both the situations are
sufficiently dilemmatic to leave even a seasoned HR campaigner in a fix.
Privacy Issues
Any person working with any organisation is an individual and has a
personal side to his existence which he demands should be respected and
not intruded. The employee wants the organisation to protect his/her
personal life. This personal life may encompass things like his religious,
political and social beliefs, etc. However, certain situations may arise that
mandate snooping behaviours on the part of the employer. For example,
mail scanning is one of the activities used to track the activities of an
employee who is believed to be engaged in activities that are not in the
larger benefit of the organisation.
Similarly, there are ethical issues in HR that pertain to health and safety,
restructuring and layoffs, and employee responsibilities. There is still a
debate going on whether such activities are ethically permitted or not.
Layoffs, for example, are no more considered as unethical as they were
thought of in the past.
285
Employee Responsibility
An effective Accident Prevention Programme should include the defined
responsibilities for management, supervisors, and employees.
Management, by law, has responsibility for the safety and health of all
employees as well as providing a safe workplace. Supervisors have
responsibility for providing a safe workplace as well as managing the
production issues.
Performance Appraisal is the systematic evaluation of the performance of
employees to understand the abilities of a person for further growth and
development. It is generally done in systematic ways which are as follows:
a. The supervisors measure the pay of employees, and compare it with
targets and plans.
b. The supervisor analyses the factors behind work performances of
employees.
c. The employers are in position to guide the employees for a better
performance.
Restructuring and Layoff
Restructuring is the corporate management term for the act of reorganising
the legal, ownership, operational, or other structures of a company for the
purpose of making it more profitable, or better organised for its present
needs. Other reasons for restructuring include a change of ownership or
ownership structure, demerger, or a response to a crisis or major change in
the business such as bankruptcy, repositioning, or buyout. Restructuring
may also be described as corporate restructuring, debt restructuring and
financial restructuring.
Layoff is a suspension or termination of employment (with or without
notice) by the employer or management. Layoffs are not caused by any
fault of the employees but by reasons such as lack of work, cash, or
material. Permanent layoff is called redundancy.
286
Safety and Health

Occupational Safety and Health (OSH) is a cross-disciplinary area
concerned with protecting the safety, health and welfare of people engaged
in work or employment. The goals of occupational safety and health
programmes include fostering a safe and healthy work environment. OSH
may also protect co-workers, family members, employers, customers, and
many others who might be affected by the workplace environment.
15.2 MANAGING ETHICS

Management ethics are the ethical treatment of employees, stockholders,
owners, and the public by a company. A company, while needing to make a
profit, should have good ethics. Employees should be treated well, whether
they are employed here or overseas. By being respectful of the
environment in the community, a company shows good ethics, and good,
honest records also show respect to stockholders and owners.
Ethics and ethical behaviour are the essential parts of healthy
management. From a management perspective, behaving ethically is an
integral part of long-term career success. Wide access to information and
more business opportunities than in the past makes ethics a need in the
modern business world.
287
15.3 BENEFITS OF MANAGING ETHICS IN THE WORKPLACE

Many people are used to reading or hearing of the moral benefits of
attention to business ethics. However, there are other types of benefits, as
well. The following list describes various types of benefits from managing
ethics in the workplace:
1. Attention to business ethics has substantially improved society:
A matter of decades ago, children in our country worked 16-hour days.
Workers’ limbs were torn off and disabled workers were condemned to
poverty and often to starvation. Trusts controlled some markets to the
extent that prices were fixed and small businesses choked out. Price
fixing crippled normal market forces. Employees were terminated based
on personalities. Influence was applied through intimidation and
harassment. Then society reacted and demanded that businesses place
high value on fairness and equal rights. Anti-trust laws were instituted.
Government agencies were established. Unions were organised. Laws
and regulations were established.
2. Ethics programmes help maintain a moral course in turbulent
times: As noted earlier in this document, Wallace and Pekel explain that
attention to business ethics is critical during times of fundamental
change much like those faced now by businesses, both non-profit and
for-profit. During times of change, there is often no clear moral compass
to guide leaders through complex conflicts about what is right or wrong.
Continuing attention to ethics in the workplace sensitises leaders and
staff to how they want to act consistently.
3. Ethics programmes cultivate strong teamwork and productivity:
Ethics programmes align employee behaviours with the top priority
ethical values preferred by leaders of the organisation. Usually, an
organisation finds surprising disparity between its preferred values and
the values actually reflected by behaviours in the workplace. Ongoing
attention and dialogue regarding values in the workplace builds
openness, integrity and community critical ingredients of strong teams
in the workplace. Employees feel strong alignment between their values
and those of the organisation. They react with strong motivation and
performance.
288
4. Ethics programmes support employee growth and meaning:

Attention to ethics in the workplace helps employees face reality, both
good and bad in the organisation and themselves. Employees feel full
confidence. They can admit and deal with whatever comes their way.
Bennett, in his article “Unethical Behaviour, Stress Appear Linked”,
explained that a consulting company tested a range of executives and
managers. Their most striking finding: the more emotionally healthy
executives, as measured on a battery of tests, the more likely they were
to score high on ethics tests.
5. Ethics programmes are an insurance policy; they help ensure
that policies are legal: There are an increasing number of lawsuits in
regard to personnel matters and to effect an organisation’s services or
products on stakeholders. As mentioned earlier in this document, ethical
principles are often state-of-the-art legal matters. These principles are
often applied to current, major ethical issues to become legislation.
Attention to ethics ensures highly ethical policies and procedures in the
workplace. It is far better to incur the cost of mechanisms to ensure
ethical practices now than to incur costs of litigation later. A major
intent of well-designed personnel policies is to ensure ethical treatment
of employees, e.g., in matters of hiring, evaluating, disciplining, firing,
etc. Drake and Drake note that “an employer can be subject to suit for
breach of contract for failure to comply with any promise it made, so the
gap between stated corporate culture and actual practice has significant
legal, as well as ethical implications.”
6. Ethics programmes help avoid criminal acts “of omission” and
can lower fines: Ethics programmes tend to detect ethical issues and
violations early so that they can be reported or addressed. In some
cases, when an organisation is aware of an actual or potential violation
and does not report it to the appropriate authorities, this can be
considered a criminal act, e.g., in business dealings with certain
government agencies, such as the Defense Department. The recent
Federal Sentencing Guidelines specify major penalties for various types
of major ethics violations. However, the guidelines potentially lower
fines if an organisation has clearly made an effort to operate ethically.
289
7. Ethics programmes help manage values associated with quality

management, strategic planning and diversity management
benefit needs far more attention: Ethics programmes identify
preferred values and ensuring organisational behaviours are aligned
with those values. This effort includes recording the values, developing
policies and procedures to align behaviours with preferred values, and
then training all personnel about the policies and procedures. This
overall effort is very useful for several other programs in the workplace
that require behaviours to be aligned with values, including quality
management, strategic planning and diversity management. Total
Quality Management includes high priority on certain operating values,
e.g., trust among stakeholders, performance, reliability, measurement,
and feedback. Eastman and Polaroid use ethics tools in their quality
programmes to ensure integrity in their relationships with stakeholders.
Ethics management techniques are highly useful for managing strategic
values, e.g., expand market share, reduce costs, etc. McDonnell
Douglas integrates their ethics programmes into their strategic planning
process. Ethics management programmes are also useful in managing
diversity. Diversity is much more than the colour of people’s skin – it is
acknowledging different values and perspectives. Diversity programmes
require recognising and applying diverse values and perspectives. These
activities are the basis of a sound ethics management programme.
8. Ethics programmes promote a strong public image: Attention to
ethics is also strong public relations admittedly; managing ethics should
not be done primarily for reasons of public relations. But, frankly, the
fact that an organisation regularly gives attention to its ethics can
portray a strong positive to the public. People see those organisations as
valuing people more than profit, as striving to operate with the utmost
of integrity and honour. Aligning behaviour with values is critical to
effective marketing and public relations programmes. Consider how
Johnson & Johnson handled the Tylenol crisis versus how Exxon handled
the oil spill in Alaska. Bob Dunn, President and CEO of San Francisco-
based Business for Social Responsibility, puts it best: “Ethical values,
consistently applied, are the cornerstones in building a commercially
successful and socially responsible business.”
290
9. Overall benefits of ethics programmes: Donaldson and Davis, in

“Business Ethics? Yes, But What Can it Do for the Bottom Line?” explain
that managing ethical values in the workplace legitimises managerial
actions, strengthens the coherence and balance of the organization’s
culture, improves trust in relationships between individuals and groups,
supports greater consistency in standards and qualities of products, and
cultivates greater sensitivity to the impact of the enterprise’s values and
messages.
10.Last and most formal attention to ethics in the workplace is the right
thing to do.
15.4 ETHICS IN HRM – GLOBAL CONTEXT

• HR acts as the custodian and driver of the ethics of the organisation,
ensuring that codes are set and people trained in complying with those
codes and policies.
• Ethics of working acts as brand ambassador of the company and
increases their credibility with their stakeholders.
• Ethics need to be spelt out clearly without any ambiguity so that there
are no multiple interpretations in action.
• Ethics is best learnt, understand and practiced in action when an
employee who is hired comes from an ethical value-based behaviour.
291
15.5 GUIDELINES FOR MANAGING ETHICS IN THE

WORKPLACE
The following guidelines ensure that the ethics management programme is
operated in a meaningful fashion:
1. Recognise that managing ethics is a process: Ethics is a matter of
values and associated behaviours. Values are discerned through the
process of ongoing reflection. Therefore, ethics programmes may seem
more process-oriented than most management practices. Managers
tend to be skeptical of process-oriented activities, and instead prefer
processes focused on deliverables with measurements. However,
experienced managers realise that the deliverables of standard
management practices (planning, organising, motivating and
controlling) are only tangible representations of very process-oriented
practices. For example, the process of strategic planning is much more
important than the plan produced by the process. The same is true for
ethics management. Ethics programmes do produce deliverables, e.g.,
codes, policies and procedures, budget items, meeting minutes,
authorisation forms, newsletters, etc. However, the most important
aspect from an ethics management programme is the process of
reflection and dialogue that produces these deliverables.
2. The bottom line of an ethics programme is accomplishing
preferred behaviours in the workplace: As with any management
practice, the most important outcome is behaviours preferred by the
organisation. The best of ethical values and intentions are relatively
meaningless unless they generate fair and just behaviours in the
workplace. That is why practices that generate lists of ethical values, or
codes of ethics, must also generate policies, procedures and training
that translate those values to appropriate behaviours.
3. The best way to handle ethical dilemmas is to avoid their
occurrence in the first place: That is why practices such as
developing codes of ethics and codes of conduct are so important. Their
development sensitises employees to ethical considerations and
minimises the chances of unethical behaviour occurring in the first
place.
292
4. Make ethics decisions in groups, and make decisions public as

appropriate: This usually produces better quality decisions by including
diverse interests and perspectives, and increases the credibility of the
decision process and outcome by reducing suspicion of unfair bias.
5. Integrate ethics management with other management practices:
When developing the values statement during strategic planning,
include ethical values preferred in the workplace. When developing
personnel policies, reflect on what ethical values you would like to be
most prominent in the organisation’s culture and then design policies to
produce these behaviours.
6. Use cross-functional teams when developing and implementing
the ethics management programme: It is vital that the
organisation’s employees feel a sense of participation and ownership in
the programme if they are to adhere to its ethical values. Therefore,
include employees in developing and operating the programme.
7. Value forgiveness: This may sound rather religious or preachy to
some, but it is probably the most important component of any
management practice. An ethics management programme may at first
actually increase the number of ethical issues to be dealt with because
people are more sensitive to their occurrence. Consequently, there may
be more occasions to address people’s unethical behaviour. The most
important ingredient for remaining ethical is trying to be ethical.
Therefore, help people recognise and address their mistakes and then
support them to continue to try operate ethically.
8. Note that trying to operate ethically and making a few mistakes
is better than not trying at all: Some organisations have become
widely known as operating in a highly ethical manner, e.g., Ben &
Jerry’s, Johnson & Johnson, Aveda, Hewlett Packard, etc. Unfortunately,
it seems that when an organisation achieves this strong public image, it
is placed on a pedestal by some business ethics writers. All
organisations are comprised of people and people are not perfect.
However, when a mistake is made by any of these organisations, the
organisation has a long way to fall. In our increasingly critical society,
these organisations are accused of being hypocritical and they are soon
pilloried by social critics. Consequently, some leaders may fear sticking
their necks out publicly to announce an ethics management programme.
This is extremely unfortunate. It's the trying that counts and brings
peace of mind not achieving a heroic status in society.
293
15.6 KEY ROLES AND RESPONSIBILITIES IN ETHICS

MANAGEMENT
Depending on the size of the organisation, certain roles may prove useful
in managing ethics in the workplace. These can be full-time roles or part-
time functions assumed by someone already in the organisation. Small
organisations certainly will not have the resources to implement each the
following roles using different people in the organisation. However, the
following functions points out responsibilities that should be included
somewhere in the organisation:
1. The organisation’s chief executive must fully support the
programme: If the chief executive is not fully behind the programme,
employees will certainly notice and this apparent hypocrisy may cause
such cynicism that the organisation may be worse off than having no
formal ethics programme at all. Therefore, the chief executive should
announce the programme, and champion its development and
implementation. Most important, the chief executive should consistently
aspire to lead in an ethical manner. If a mistake is made, admit it.
2. Consider establishing an Ethics Committee at the board level:
The Committee would be charged to oversee development and
operation of the ethics management programme.
3. Consider establishing an Ethics Management Committee: It would
be charged with implementing and administrating an ethics
management programme, including administrating and training about
policies and procedures, and resolving ethical dilemmas. The Committee
should be comprised of senior officers.
4. Consider assigning/developing an Ethics Officer: This role is
becoming more common, particularly in larger and more progressive
organisations. The Ethics Officer is usually trained about matters of
ethics in the workplace, particularly about resolving ethical dilemmas.
5. Consider establishing an ombudsperson: The ombudsperson is
responsible to help co-ordinate development of the policies and
procedures to institutionalise moral values in the workplace. This
position usually is directly responsible for resolving ethical dilemmas by
interpreting policies and procedures.
294
6. Note that one person must ultimately be responsible for

managing the ethics management programme.
15.7 ETHICS TOOLS: CODES OF ETHICS

According to Wallace, “A credo generally describes the highest values to
which the company aspires to operate. It contains the ‘thou shalts.’ A code
of ethics specifies the ethical rules of operation. It is the “thou shalt nots."
In the latter 1980s, The Conference Board, a leading business membership
organisation, found that 76% of corporations surveyed had codes of ethics.
Some business ethicists disagree that codes have any value. Usually, they
explain that too much focus is put on the codes themselves, and that codes
themselves are not influential in managing ethics in the workplace. Many
ethicists note that it is the developing and continuing dialogue around the
code’s values that is most important.
Occasionally, employees react to codes with suspicion, believing the values
are “motherhood and apple pie”, and codes are for window dressing. But,
when managing a complex issue, especially in a crisis, having a code is
critical. More important, it is having developed a code. In the mid-70s,
Johnson & Johnson updated their credo in a series of challenge meetings.
Bob Kniffin, Vice President of External Affairs, explains, “We pored over
each phrase and word. We asked ourselves, ‘Do we still believe this?’ Our
meetings resulted in some fine tuning, but basically we did not change the
values. The meetings infused the values in the minds of all of us
managers.” Many believe this process guided them in their well-known
decision to pull Tylenol bottles off-the-shelves and repackage them at a
$100 million expense. Kniffin offers some sound, practical advice. “In a
crisis, there’s no time for moral conclusions. Get those done beforehand.
But also realize theress no substitute for sound crisis management. For
example, have a list of people with fundamental knowledge, such as who
transports your products where and when.”
295
Developing Codes of Ethics

Note that if your organisation is quite large, e.g., includes several large
programmes or departments, you may want to develop an overall
corporate code of ethics and then a separate code to guide each of your
programmes or departments.
Also, note that codes should not be developed out of the Human Resource
or Legal departments alone, as is too often done. Codes are insufficient if
intended only to ensure that policies are legal. All staff must see the ethics
programme being driven by top management.
Note that codes of ethics and codes of conduct may be the same in some
organisations, depending on the organisation’s culture and operations and
on the ultimate level of specificity in the code(s).
1. Organisational Culture: Review to get a basic understanding of
“personalities” of organisations.
2. Strategic Planning: Specific to developing a Values Statement.
3. Valuing Diversity: To consider that there are other values and
perspectives.
Consider the following guidelines when developing codes of ethics:
1. Review any values needed to adhere to relevant laws and regulations;
this ensures your organisation is not (or is not near) breaking any of
them. (If you are breaking any of them, you may be far better off to
report this violation than to try hiding the problem. Often, a reported
violation generates more leniency than outside detection of an
unreported violation, particularly per the new Federal Sentencing
Guidelines.) Increase priority on values that will help your organisation
operate to avoid breaking these laws and to follow necessary
regulations.
2. Review which values produce the top three or four traits of a highly
ethical and successful product or service in your area, e.g., for
accountants: objectivity, confidentiality, accuracy, etc. Identify which
values produce behaviours that exhibit these traits.
296
3. Identify values needed to address current issues in your workplace.

Appoint one or two key people to interview key staff to collect
descriptions of major issues in the workplace. Collect descriptions of
behaviours that produce the issues. Consider which of these issues is
ethical in nature, e.g., issues in regard to respect, fairness and honesty.
Identify the behaviours needed to resolve these issues. Identify which
values would generate those preferred behaviours. There may be values
included here that some people would not deem as moral or ethical
values, e.g., team-building and promptness, but for managers, these
practical values may add more relevance and utility to a code of ethics.
4. Identify any values needed based on findings during strategic planning;
Review information from your SWOT analysis (identifying the
organisation’s strengths, weaknesses, opportunities and threats). What
behaviours are needed to build on strengths, shore up weaknesses, take
advantage of opportunities and guard against threats?
5. Consider any top ethical values that might be prized by stakeholders.
For example, consider expectations of employees, clients/customers,
suppliers, funders, members of the local community, etc.
6. Collect from the above steps, the top five to ten ethical values which are
high priorities in your organisation.
7. Examples of ethical values might include:
a. Trustworthiness: Honesty, integrity, promise-keeping ans loyalty.
b. Respect: Autonomy, privacy, dignity, courtesy, tolerance and
acceptance
c. Responsibility: Accountability and pursuit of excellence
d. Caring: Compassion, consideration, giving, sharing, kindness and
loving.
e. Justice and fairness: Procedural fairness, impartiality, consistency,
equity, equality and due process.
f. Civic virtue and citizenship: Law abiding, community service,
protection of environment.
297
8. Compose your code of ethics; attempt to associate with each value, two
example behaviours which reflect each value. Critics of codes of ethics
assert that they seem vacuous because many only list ethical values
and do not clarify these values by associating examples of behaviours.
9. Include wording that indicates all employees are expected to conform to
the values stated in the code of ethics.
10.Obtain review from key members of the organisation. Get input from as
many members as possible.
11.Announce and distribute the new code of ethics (unless you are waiting
to announce it along with any new codes of conduct and associated
policies and procedures).
12.Update the code at least once a year.
15.8 ETHICS TOOLS: CODES OF CONDUCT

“Codes of conduct specify actions in the workplace and codes of ethics are
general guides to decisions about those actions,” explains Craig Nordlund,
Associate General Counsel and Secretary at Hewlett Packard. He suggests
that codes of conduct contain examples of appropriate behaviour to be
meaningful.
The Conference Board found that codes of conduct are increasingly
sophisticated and focused at lower levels in companies. Departments
frequently have their own codes. Be careful, though an organisation could
be sued for breach of contract if its practices are not in accord with its
policies. That is why legal departments should review codes of conduct and
other ethics policies. Also, that is why it is critical for organisations to
review their policies at least once a year to ensure they are in accordance
with laws and regulations.
1. Employee Law: Review major issues and topics to discern what
behaviours to avoid in the workplace.
2. Policies (Personnel): Review more specifics about what behaviours to
avoid.
298
Developing a Code of Conduct

If the organisation is quite large, e.g., includes several large programmes
or departments, may want to develop an overall corporate code of conduct,
and then a separate code to guide each of the programmes or
departments, consider the following guidelines when developing codes of
conduct:
1. Identify key behaviours needed to adhere to the ethical values
proclaimed in your code of ethics, including ethical values derived from
review of key laws and regulations, ethical behaviours needed in your
product or service area, behaviours to address current issues in your
workplace, and behaviours needed to reach strategic goals.
2. Include wording that indicates all employees are expected to conform to
the behaviours specified in the code of conduct. Add wording that
indicates where employees can go if they have any questions.
3. Obtain review from key members of the organisation. Be sure your legal
department reviews the drafted code of conduct.
4. Announce and distribute the new code of conduct.
15.9 ETHICS TOOLS: POLICIES AND PROCEDURES

1. Update policies and procedures to produce behaviors preferred from the
code of conduct, including, e.g., personnel, job descriptions,
performance appraisal forms, management-by-objectives expectations,
standard forms, checklists, budget report formats, and other relevant
control instruments to ensure conformance to the code of conduct. Try
to avoid creating ethical dilemmas such as conflicts-of-interest or
infringing on employee’s individual rights.
2. There are numerous examples of how organisations manage values
through use of policies and procedures.
3. Include policies and procedures to address ethical dilemmas.
4. Include policies and procedures to ensure training of employees about
the ethics management programme.
5. Include policies and procedures to reward ethical behaviour and impose
consequences for unethical behaviour.
299
6. Include a grievance policy for employees to use to resolve

disagreements with supervisors and staff.
7. Consider establishing an ethics “hotline”.
8. Once a year, review all personnel policies and procedures.
15.10 ETHICS TOOLS: TRAINING

The ethics programme is essentially useless unless all staff members are
trained about what it is, how it works and their roles in it. The nature of
the system may invite suspicion if not handled openly and honestly. In
addition, no matter how fair and up-to-date a set of policies is, the legal
system will often interpret employee behaviour (rather than written
policies) as de facto policy. Therefore, all staff must be aware of and act in
full accordance with policies and procedures (this is true, whether policies
and procedures are for ethics programmes or personnel management).
This full accordance requires training about policies and procedures.
Training Basics for Supervisors and Learners:
1. Orient new employees to the organisation’s ethics programme during
new-employee orientation.
2. Review the ethics management programme in management training
experiences.
3. Involving staff in review of codes is strong ethics training.
4. Involving staff in review of policies (ethics and personnel policies) is
strong ethics training.
5. One of the strongest forms of ethics training is practice in resolving
complex ethical dilemmas. Have staff use any of the three ethical-
dilemma-resolution methods in this guidebook and apply them to any of
the real-life ethical dilemmas also listed in this guidebook.
6. Include ethical performance as a dimension in performance appraisals.
7. Give all staff a copy of this free “Complete Guide to Ethics
Management”.
300
Activity A
Make checklist of how the ethics at the workplace is displayed through
behaviours and attitudes. Calibrate which of the team members are truly
ethical.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Activity B
Check out how one’s personal ethics match with the company’s ethics in
terms of behaviours, relationship and output.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
301
15.11 SUMMARY
Management ethics are the ethical treatment of employees, stockholders,
owners, and the public by a company. HR ethical issues arise in
employment, remuneration and benefits, industrial relations, and health
and safety. There are various types of benefits for managing ethics in the
workplace. There are also guidelines to ensure that ethics management
programme is operated in a meaningful fashion. It is important for
organisations to review their policies at least once a year to ensure they
are in accordance with laws and regulations.

1. Describe the ethical issues in HRM.
2. What is Managing Ethics? What are the benefits of managing ethics in
the workplace?
3. Discuss the guidelines for managing ethics in the workplace.
4. Explain the key roles and responsibilities in Ethics Management.
5. Describe the tools of Ethics.
1. HR __________ issues arise in employment, remuneration and benefits,

industrial relations, and health and safety.
(a) ethical
(b) lowest
(c) mid
(d) side
2. The HR manager is often under __________ to raise the band of base

salaries.
(a) distance
(b) pressure
(c) funds
(d) mob
302
3. Managers are __________ for aligning behaviour and avoiding

discriminatory practices.
(a) mobster
(b) killer
(c) trained
(d) general
4. Human resource __________ face bigger dilemmas in employee

hiring.
(a) big
(b) short
(c) long
(d) practitioners
5. Layoff is a suspension or termination of __________ by the employer or

management.
(a) employment
(b) drivers
(c) tent
(d) customers
6. Permanent layoff is called __________.

(a) food
(b) redundancy
(c) dumping
(d) bumping
7. Occupational Safety and Health is a cross-disciplinary area concerned

with __________ the safety, health and welfare of people engaged in
work or employment.
(a) fame
(b) pain
(c) protecting
(d) gain
303
8. Ethics and ethical behaviour are the essential parts of __________

management.
(a) fun
(b) poor
(c) random
(d) healthy
9. OSH means __________.

(a) Occupational Safety and Health
(b) Occupational Season and House
(c) Occupational Season and Health
(d) Occupational Safety and House
10.There are __________ issues pertaining to the salaries, executive

prerequisites, the annual incentive plans, etc.
(a) social
(b) ethical
(c) scientific
(d) climatic
Answers:
1. (a), 2. (b), 3. (c), 4. (d), 5. (a), 6. (b), 7. (c), 8. (d), 9. (a), 10. (b).
304
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
305
RECENT TRENDS IN HRM
Chapter 16
Recent Trends In HRM
Objectives
• Role of Technology in HRM
• How technology acts as a leverage in HRM
• Work from Home in HRM
• HRM as a part of operation verticals
Structure:
16.1 Recent Changes in Industry
16.2 Technology as a Leverage to Change
16.3 Impact of Technology Driven Functions
16.4 Adaptation of HRM to the New Changes
16.5 Work from Home (WFH)
16.6 Summary
306
16.1 RECENT CHANGES IN INDUSTRY

The whole corporate landscape globally has undergone a sea change.
Technology has been the main driver of the change. As a result, all
businesses have started adopting technology as a major leverage.
The structure of the organisation working has changed from goal-driven
activities to innovatively goal-driven activities. Every employee is expected
to be tech-savvy and skilled enough to absorb rapid changes. This has
resulted in organisations focusing on the learning- unlearning-relearning
path of growth.
HRM, thus, assumes a role that is a modification of the earlier roles, while
conducting the recruitment selection process the focus being more on
talent and skilled-based manpower who are quick in absorbing changes.
16.2 TECHNOLOGY AS A LEVERAGE TO CHANGE

As we all know, technology has pervaded all walks of life and an average
individual uses technology on a daily basis. In the corporate world,
technology has been a major driver in running businesses more efficiently
and effectively.
Besides having the core/domain skills, every individual is expected to be
technology literate. It must be understood that technology has its own
effect on human motivation at the workplace. It affects human behaviour
and relationships thereof. Excess of technological involvement in business
tends to dehumanise relationships at the workplace and with customers.
HRM needs to address this aspect that “modifies” human behaviour and
relationships. Too less technology does not serve “business” purpose and
too much technology does not serve “human relations” purpose. Hence, a
balance between the two needs to be worked out.
HRM has to ensure, as a strategic partner to the top management, as to
the extent to which certain functions need to be handled manually and
certain other functions using technology.
307
16.3 IMPACT OF TECHNOLOGY DRIVEN FUNCTIONS

Globally, businesses have grown rapidly and even transited to higher
technology driven units. Manufacturing units have converted man-machine
production into robotic production. Service units, on the other hand, are
overly dependent on technology as a major driver.
As a result, manpower is getting adapted to technology driven businesses.
At a same time, the rapidity with which the technology is advancing, and in
turn, businesses need to be addressed effectively. There is a need to have
a critical mass of human resources who are adaptable to quick changes. In
reality, human systems do not adapt to rapid changes that easily. So, there
remains a majority of employees who lag behind in adapting to rapid
changes.
Unless an organisation creates a corporate culture of adaptation to rapid
changes, it would be highly challenging to run a business by retaining
people who are constantly re-learning to the rapid changes.
16.4 ADAPTATION OF HRM TO THE NEW CHANGES

The key driver to the changes in an organisation is the HR Department.
They need to recognise and address the changes even before they occur.
Hence, HR personnel needs to be thorough and updated on the latest
developments in technology. This facilitates them to identify and create
proper job profiles in line with changing situations.
One of the major changes that the whole world has gone through is the
concept of:Work from Home (WFH).
308
16.5 WORK FROM HOME (WFH)

Thanks to the pandemic, for nearly two years from the year 2020 till the
end of 2021, organisations resorted to the new way of working – WFH.
In a bid to face “new normal”, organisations, and in turn HR Departments
of companies, face the challenge of how to keep the organisation running
with the existing manpower “locked in” at homes.
The concept of Work from Home, initially, appeared to be an ad hoc
(temporary) arrangement to get back to production and customer
deliveries, given the constraints of movement and delivery.
With the WFH taking off, as time progress, the realities and challenges
cropped up on both sides: with the organisations and also with the
employees.
WFH – Operational Challenges
HRM had to devise a creative approach towards employee engagement,
empowerment and delivery of their job functions, working from home.
Obviously, the existing pre-pandemic structure of working had to be
modified in terms of policies, processes, procedures, etc.
The biggest challenge was to ensure accountability and timely delivery of
quality output like before.
Every organisation has certain functions where employees have to
necessarily attend their job functions, physically at the workplace, like
productions, logistics, etc. With all the restrictions, HR played remarkably
good role in redefining how such personnel could attend office, given the
constraints. At the same time, like in every change process, there was a
new learning and redefining of job functions and positions, much to the
advantage of organisational efficiency.
309
Similarly, there are certain job functions in which the employees need not
be physically present at the workplace and could execute the tasks from
elsewhere (e.g., home). Initially, many employees working from home
faced many challenges like improper ambiance, poor internet connectivity
and hardware, etc. As time progressed, the organisation took the initiative
of equipping the employees adequately as in an office environment. This
initiative was an eye opener for many organisations and the HR started
modifying the HR policies to suit this new way of working. As a matter of
fact many organisations, re-designed job functions such that most of the
employees could work from home near future.
Thus, Work from Home is a new initiative taken up by companies in which
HR plays a critical role slightly different from the pre-pandemic days.
Sudden unexpected changes offer ample opportunities for creativity and
innovation in handling the chaos and converting it into an useful effective
way of working.
Organisations realised that the new way of working could continue as a
policy thereby saving on costs and time.
To sum up, WFH has been more advantageous to organisation as well as to
employees on many aspects. We can envision that in future organisations
would create HR policies considering WFH as a norm.
310
16.6 SUMMARY
The whole corporate landscape globally has undergone a sea change.
Technology has been the main driver of the change. As a result, all
businesses have started adopting technology as a major leverage. Every
individual is expected to be technology literate. Technology has impacted
all business models in a big way. HR has to steer the use of technology
with appropriate mix of human and technological intervention. Among the
various trends which have emerged recently in the world of business, the
most impactful has been “Work from Home (WFH)”. This has had major
shift in the manner in which organisations perceive the future of manpower
requirements in terms of precious resources like time and money.

1. Enlist the recent trends that have impacted you at the workplace. Which
of these made a major change in your effectiveness?
2. How does technology make or break the efficiency of the workplace?
3. Is technology the ultimate solution for growth in an organisation? Give
reasons.
4. What is your personal view on Work from Home and how has it
impacted your profile, behaviour and efficiency?
311
1. In the recent years, organisations have transited from goal-driven

activities to __________.
(a) Innovative goal-drivenness
(b) Creative choices
(c) Global activities
(d) Neutrality
2. Technology is the only solution to all business functions.

(a) True
(b) False
(c) Partly true
(d) None of the above
3. The negative impact of use of technology has been __________.

(a) Excessive production and waste
(b) Dehumanising work relations
(c) Huge investments not affordable by some companies
(d) Quality errors
4. Work from Home (WFH) is more advantageous since it saves time,

money and travel for the employees. One factor that is challenging is
__________.
(a) Company costs going up
(b) Employee resigning
(c) Monitoring employee involvement
(d) Work getting affected adversely
Answers - 1- a, 2- c, 3-b, 4-c
312
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
313

Human Resource Management 751 v1

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Human Resource Management 751 v1

Uploaded by

Copyright:

Available Formats

HUMAN RESOURCE MANAGEMENT

Sub Code - 751

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Mr. Smitesh Bhosale

Prof. Dr. V.H. Iyer Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition, November 2022

Prof. Venkat S. Iyer

Chapter No. Chapter Name Page No.

1 Introduction to Human Resource Management 5-26

The story continues…….

1.1 NATURE OF HUMAN RESOURCE MANAGEMENT (HRM)

Organisations have realised that they may be technologically advanced but

1.2 FUNCTIONS IN HRM

Ajay Verma: Well, it all started with the industrialisation……..

1.3 EVOLUTION OF HRM

• 1985-2000: Three trends dramatically impact HRM. The first is the

HRM has evolved into glocalisation – thinking global at the corporate

There are also conscious shifts from a central HRM function to a

List down the stages in the development of HRM.

1.4 DIFFERENCE BETWEEN PERSONNEL MANAGEMENT,

Personnel management is a forerunner to what is now popularly termed as

Personnel management could be imagined as a “9.00 to 5.00” approach of

In short, Personnel Management address the employees’ feel-good factors

Thus, HRM takes care of the total employee 24/7.

Ajay Verma: I am glad to hear it…

Rajesh: How is the HR process structured in an organisation?

Ajay Verma: Yes, I was just getting to that topic.

1.5 HRM PROCESS

Fig. 1.1: HRM Process

It is the process of collecting job-related information which will then help in

Process of forecasting an organisation’s future demand for, and supply of,

Recruitment and Selection

Recruitment involves attracting and obtaining applications from eligible job-

Selection is the process of choosing the right individuals for a job in an

Motivation undertakes to understand and change an employee’s behaviour

Employee Engagement address the emotional engagement of the employee

Training and Development

It refers to the imparting of requisite skills, abilities and knowledge to an

Employee welfare ensures that an employee receives other benefits and

It is an objective assessment of an individual’s performance against the

Compensation or remuneration is what an employee receives in return for

Separation is a process concerned with when an employee leaves an

Ajay Verma: That, in a nutshell, was how HR works in an organisation. I

Rajesh: Ok Sir. By the way, is HR affected by what happens in the world?

Ajay Verma: HR is very much affected by what happens in the world

1.6 FACTORS AFFECTING HRM

External environment consists of the political factors, legal factors, job

Internal environment consists of forces like strategy, unions and

HRM is impacted by the various political forces or institutions in a country.

Job market provides the supply of manpower to the organisation. Job

Competition plays a very important role in some of the HR functions.

Today, in a highly competitive and demanding world, customers want high-

The quality of labour and human resources is affected by the economic